### Inland Revenue Ordinance 《稅務條例》

98. Reduction of taxes for year of assessment 2015/16
Schedule 38 contains provisions relating to the reduction of salaries tax, profits tax and tax under personal assessment for the year of assessment commencing on 1 April 2015.
(Added 8 of 2016 s. 4)

99. Reduction of taxes for year of assessment 2016/17
Schedule 40 contains provisions relating to the reduction of salaries tax, profits tax and tax under personal assessment for the year of assessment commencing on 1 April 2016. 
(Added 3 of 2017 s. 5)

### Monetary Authority under section 5A(1) of the Exchange Fund Ordinance (Cap. 66) and any person appointed under section 5A(3) of that Ordinance, being recipients of any benefit granted under any provident fund scheme to which the Monetary Authority is a party, shall be exempt from the payment of salaries tax chargeable in respect of the whole of that benefit for any year of assessment under section 8 of the Ordinance, subject to the conditions specified in subsection (3) being satisfied as regards that benefit 《外匯基金條例》

1. Exemption from salaries tax
(1) The person for the time being appointed as the Monetary Authority under section 5A(1) of the Exchange Fund Ordinance (Cap. 66) and any person appointed under section 5A(3) of that Ordinance, being recipients of any benefit granted under any provident fund scheme to which the Monetary Authority is a party, shall be exempt from the payment of salaries tax chargeable in respect of the whole of that benefit for any year of assessment under section 8 of the Ordinance, subject to the conditions specified in subsection (3) being satisfied as regards that benefit.
(2) This section shall apply to the years of assessment since, and including the year of assessment commencing on, 1 April 1993.
(3) The conditions referred to in subsection (1) are that—
(a) the circumstances under which the benefit is granted are the same as the circumstances under which a sum payable under a recognized occupational retirement scheme as defined in the Ordinance must be received or withdrawn in order to be excluded from the computation of income under the Ordinance;
(b) the extent to which the benefit is excluded from the computation of income under the Ordinance does not exceed the extent to which a sum received under or withdrawn from such a recognized occupational retirement scheme is so excluded; and
(c) any other condition or requirement specified in the Ordinance for excluding from the computation of income a sum received under or withdrawn from such a recognized occupational retirement scheme is complied with in respect of the granting of the benefit.

### Inland Revenue Rules 《稅務規則》

1. Citation
These rules may be cited as the Inland Revenue Rules.

2. Rates of depreciation
(1) For the purpose of the Ordinance, the expression machinery or plant

2A. General apportionment of outgoings and expenses
(1) No deduction shall be allowed for any outgoing or expense incurred in the production of profits not arising in or derived from Hong Kong, but where any outgoing or expense was incurred partly in the production of profits arising in or derived from within Hong Kong and partly in the production of profits arising or derived from outside Hong Kong, then, for the purpose of ascertaining the extent to which such outgoing or expense is deductible under section 16 of the Ordinance, an apportionment thereof shall be made on such basis as is most appropriate to the activities of the trade, profession or business concerned. (7 of 1986 s. 12)
(2) Where, apart from or in addition to the circumstances referred to in paragraph (1) as giving rise to an apportionment, it is necessary to make an apportionment of any outgoing or expense by reason of it having been incurred not wholly and exclusively in the production of profits in respect of which a person is chargeable to tax under Part IV of the Ordinance, such apportionment or further apportionment, as the case may be, shall, subject to the provisions of rules 2B and 2C, be made on such basis as is most reasonable and appropriate in the circumstances of the case.
(L.N. 129 of 1965)

2B. Interest on borrowed money used in purchase of shares
(1) Where interest is paid or payable on any sum of money borrowed and used partly for the purpose of acquiring shares in a corporation which is chargeable to tax under Part IV of the Ordinance and partly for some other purpose or purposes, such interest as is attributable to the part used for the purpose of acquiring such shares shall, subject to paragraph (2), not be an allowable deduction, and where any apportionment is necessary to ascertain the amount of interest so attributable, it shall be made on such basis as is most reasonable and appropriate in the circumstances of the case.
(2) Where a person is chargeable to tax under Part IV of the Ordinance in respect of profits from share dealing, no apportionment or disallowance of interest shall be made under paragraph (1) in respect of any money borrowed and used for the purpose of acquiring the shares constituting the subject-matter of such share dealing.
(L.N. 129 of 1965)

### Inland Revenue Rules 《稅務規則》

2C. Investment portfolios
(1) Where the investment portfolio of any person who is chargeable to tax under Part IV of the Ordinance is, in the opinion of the assessor, sufficiently substantial to warrant making an adjustment in respect of the expenses of supervision and management of the portfolio, a due proportion of the management, clerical and general expenses attributable to the supervision and management of the investment portfolio shall be disallowed, and, unless a more practical and suitable basis is available in the circumstances of the case, the estimation of such due proportion of the management, clerical and general expenses shall be made on the basis of such percentage of the total cost of the investments and securities which comprise the investment portfolio as is most reasonable and appropriate in the circumstances of the case, not exceeding—
(a) one-eighth per cent in any case where the investments are held not for purpose of, or not solely for the purpose of, producing profits by way of dividends, but for, or also for, the purpose of producing profits, by resale or share dealing;
(b) one-half per cent, in any other case.
(2) Where the investment portfolio of any person who is chargeable to tax under Part IV of the Ordinance is not, in the opinion of the assessor, sufficiently substantial to warrant making an adjustment in respect of the supervision and management of the portfolio, no disallowance or apportionment shall be made under paragraph (1).
(L.N. 129 of 1965)

2D. Rights of objection and appeal
Any decision under rule 2A, 2B or 2C shall be subject to the same rights of objection and appeal as are conferred by Part XI of the Ordinance.
(L.N. 129 of 1965)