### Inland Revenue Ordinance 《稅務條例》

15N. When does section 15M not apply
(1) This section applies to specified foreign-sourced income in relation to which section 15I(1), but for this section, would not have operated because of section 15M.
(2) Section 15M only applies if the Commissioner is satisfied that—
(a) where the specified foreign-sourced income is a dividend (whether or not the underlying profits of the income consist of any dividend)—
(i) the income is subject to a qualifying similar tax in a territory outside Hong Kong; or
(ii) the underlying profits of the income are subject to a qualifying similar tax in a territory outside Hong Kong, and the amount of the profits is equal to or larger than that of the income;
(b) where the specified foreign-sourced income (subject income

15O. Supplementary provision to section 15N: meaning of direct investee entit

15OA. Exception 4: intra-group transfer relief for disposal gain
(1) This section applies if—
(a) any specified foreign-sourced income (subject income

### Inland Revenue Ordinance 《稅務條例》

15OC. Supplementary provision to sections 15OA and 15OB: meaning of associated
(1) For the purposes of sections 15OA and 15OB, 2 entities are associated with each other if—
(a) one of them has an associating interest in the other; or
(b) a third entity has an associating interest in both of them.
(2) For the purposes of subsection (1), an entity (entity A

15P. Setting off loss sustained from sale of certain property outside Hong Kong
(Amended 32 of 2023 s. 8)(1) This section applies if—
(a) an MNE entity sustains a loss from a sale in a territory outside Hong Kong of any property (other than qualifying intellectual property as defined by section 1(2) of Schedule 17FC); (Amended 32 of 2023 s. 8)
(b) the proceeds of the sale are received in Hong Kong by the MNE entity during the basis period of a year of assessment; and
(c) had a gain been derived from the sale and received in Hong Kong by the MNE entity, the gain would have been chargeable to profits tax because of section 15I(1).
(2) Subject to subsection (3)—
(a) the loss may be set off against the MNE entity’s assessable profits for that year of assessment; and
(b) any amount of the loss not so set off may be carried forward and set off, in accordance with section 19C, against the MNE entity’s assessable profits for subsequent years of assessment.
(3) The loss may only be set off to the extent that the assessable profits concerned are derived from specified foreign-sourced income that is chargeable to profits tax because of section 15I(1).

15Q. Outgoing or expense incurred in production of specified foreign-sourced income may be deducted
Without limiting Division 4, if—
(a) an outgoing or expense (however called) is incurred in the production of specified foreign-sourced income; and
(b) the income is chargeable to profits tax for a year of assessment (that year of assessment

### Inland Revenue Ordinance 《稅務條例》

15R. Balancing charge or allowance relating to production of specified foreign-sourced income may be taken into account
Without limiting sections 18F and 19E and Part 6, if—
(a) any balancing charge directed to be made on, or any allowance made to, an MNE entity under Part 6 for a year of assessment (or any part of such a charge or allowance) is not taken into account under section 18F or 19E when calculating the amount of the entity’s assessable profits or loss for that year of assessment because—
(i) that charge or allowance, or that part of the charge or allowance, relates to the production of specified foreign-sourced income; and
(ii) the income—
(A) is not received in Hong Kong during the basis period of that year of assessment; and
(B) is not chargeable to profits tax for that year of assessment; and
(b) the income—
(i) is received in Hong Kong during the basis period of a subsequent year of assessment; and
(ii) is chargeable to profits tax for that subsequent year of assessment because of section 15I(1),
that charge or allowance, or that part of the charge or allowance, is to be taken into account under section 18F or 19E (as the case requires) when calculating the amount of the entity’s assessable profits or loss for that subsequent year of assessment as if that charge or allowance, or that part of the charge or allowance, were directed to be made on, or made to, the entity under Part 6 for that subsequent year of assessment.

15S. Records to be kept
(1) Section 51C applies, with the modifications specified in subsection (2), to an MNE entity that receives in Hong Kong specified foreign-sourced income to which section 15I(1) applies.
(2) The MNE entity must retain records of transactions, acts or operations relating to the specified foreign-sourced income under section 51C at least until the later of the following—
(a) the expiry of 7 years after the completion of those transactions, acts or operations; or
(b) the expiry of 7 years after the income is received, or to be regarded as received, in Hong Kong.
(3) Section 80 applies to a failure to comply with section 51C as modified by subsection (2) in the same way section 80 applies to a failure to comply with section 51C.

### Inland Revenue Ordinance 《稅務條例》

16A. Special payment under an approved retirement scheme allowable as a deduction
(1) Subject to section 17(1)(k), where a person carrying on a trade, profession or business in Hong Kong makes a payment which is either— (Amended 7 of 1986 s. 12)
(a) a contribution, other than an ordinary annual contribution, to a fund duly established under a recognized occupational retirement scheme; or
(b) a premium, other than an ordinary annual premium, in respect of a contract of insurance under a recognized occupational retirement scheme; or (Amended 4 of 1998 s. 6)
(c) a contribution, other than regular contributions, paid to a mandatory provident fund scheme, (Added 4 of 1998 s. 6)
such payment shall, to the extent that it is made in respect of individuals employed by such person for the purposes of producing profits in respect of which he is chargeable to tax under this Part and that it is not excessive in view of all the relevant circumstances, be deemed to be an expense wholly and exclusively incurred in the production of such profits and shall be allowed as a deduction therefrom in accordance with subsection (2). (Amended 76 of 1993 s. 6)
(2) For the purpose of making the deduction provided for in subsection (1), one fifth part of the payment shall be deemed to have been expended during the basis period in which the payment was actually made and the remaining 4 parts shall be deemed to have been expended at the rate of one part in the basis period for each of the succeeding 4 years of assessment:
Provided that in no case shall the total amount of the deductions exceed the amount of the payment.
(3) For the purposes of subsection (1)(c), contributions are regular contributions if they are made to the mandatory provident fund scheme at regular intervals and are either of similar or substantially similar amounts or of amounts calculated by reference to a scale or a fixed percentage of a person’s salary or other remuneration. (Added 4 of 1998 s. 6)
(Replaced 49 of 1956 s. 12)