### Inland Revenue Ordinance 《稅務條例》

14M. Anti-avoidance provisions—aircraft leasing
(Amended 10 of 2022 s. 2)(1) Subsection (2) applies if—
(a) conditions are made or imposed between a corporation that is a qualifying aircraft lessor and a person who is an associate of that corporation, in their commercial or financial relations in connection with a qualifying aircraft leasing activity; and
(b) the conditions differ from those that would be made if the person were not such an associate.
(2) Any profits that, but for the conditions referred to in subsection (1)(a), would have accrued to the corporation or the person and, by reason of those conditions, have not so accrued, are to be included in the profits of the corporation or the person and taxed in accordance with this Part.
(3) Subsection (4) applies if—
(a) conditions are made or imposed between a corporation that is a qualifying aircraft leasing manager and a person who is an associate of that corporation, in their commercial or financial relations in connection with a qualifying aircraft leasing management activity; and
(b) the conditions differ from those that would be made if the person were not such an associate.
(4) Any profits that, but for the conditions referred to in subsection (3)(a), would have accrued to the corporation or the person and, by reason of those conditions, have not so accrued, are to be included in the profits of the corporation or the person and taxed in accordance with this Part.
(5) If—
(a) an aircraft is owned by a corporation that is a qualifying aircraft lessor under an arrangement (ownership arrangement

14N. Power to amend Schedule 17F
(Amended 10 of 2022 s. 2)The Commissioner may by order published in the Gazette amend Schedule 17F.
(Added 9 of 2017 s. 4)

### Inland Revenue Ordinance 《稅務條例》

14O. Interpretation of Subdivision 5 of Division 2 of Part 4
(Amended 10 of 2022 s. 2)(1) In this Subdivision— (Amended 10 of 2022 s. 2)
actual residual value (實際剩餘價值), in relation to a ship, means the actual fair market value of the ship at the end of the term of a lease or its useful economic life;
associate (相聯者)—(a) in relation to a natural person, means—
(i) a relative of the person;
(ii) a partner of the person;
(iii) if a partner of the person is a natural person—a relative of the partner;
(iv) a partnership in which the person is a partner;
(v) a corporation controlled by—
(A) the person;
(B) a relative of the person;
(C) a partner of the person;
(D) if a partner of the person is a natural person—a relative of the partner; or
(E) a partnership in which the person is a partner; or
(vi) a director or principal officer of a corporation mentioned in subparagraph (v);
(b) in relation to a corporation, means—
(i) a person who has control over the corporation;
(ii) a partner of a person mentioned in subparagraph (i);
(iii) if a person mentioned in subparagraph (i) is a natural person—a relative of the person;
(iv) if a partner mentioned in subparagraph (ii) is a natural person—a relative of the partner;
(v) a director or principal officer of—
(A) the corporation; or
(B) an associated corporation of the corporation;
(vi) a relative of a director (if the director is a natural person) or principal officer mentioned in subparagraph (v);
(vii) a partner of the corporation;
(viii) if a partner of the corporation is a natural person—a relative of the partner;
(ix) a partnership in which the corporation is a partner; or
(x) an associated corporation of the corporation;
(c) in relation to a partnership, means—
(i) a partner in the partnership;
(ii) if a partner in the partnership is a natural person—a relative of the partner;
(iii) if a partner in the partnership is another partnership—
(A) a partner in the other partnership (Partner A

### Inland Revenue Ordinance 《稅務條例》

14P. Concession for qualifying ship lessor
(Amended 10 of 2022 s. 2)(1) For the purposes of this Part and subject to subsections (4) and (6), the assessable profits of a corporation that is a qualifying ship lessor for a year of assessment are chargeable to tax under this Part at the rate specified in Schedule 8C to the extent to which those profits are assessable profits derived from its qualifying ship leasing activity.
(2) A ship lessor is a qualifying ship lessor for a year of assessment if, during the basis period for that year of assessment—
(a) it is not a ship operator;
(b) it has carried out in Hong Kong one or more qualifying ship leasing activities; and
(c) it has not carried out in Hong Kong any activity other than a qualifying ship leasing activity.
(3) For the purposes of subsection (2)(c), in determining whether a ship lessor has carried out any activity other than a qualifying ship leasing activity, only activities that generate income to the ship lessor are to be taken into account.
(4) Subsection (1) applies to a corporation for a year of assessment only if—
(a) during the basis period for that year of assessment—
(i) the central management and control of the corporation is exercised in Hong Kong;
(ii) the activities that produce its qualifying profits for that year are—
(A) carried out in Hong Kong by the corporation; or
(B) arranged by the corporation to be carried out in Hong Kong; and
(iii) those activities are not carried out by a permanent establishment outside Hong Kong; and
(b) the corporation has elected in writing that subsection (1) applies to it.

Note—
See also section 14W.
(5) An election under subsection (4)(b), once made, is irrevocable.
(6) If subsection (1) does not apply to a corporation for a year of assessment (cessation year

14Q. Allowance for capital expenditure on ship
(Amended 10 of 2022 s. 2)(1) If section 14P(1) applies to a corporation for a year of assessment, the corporation is not entitled to be granted any allowance under Part 6 for that year of assessment in respect of the capital expenditure incurred on the provision of the ship concerned.
(2) If—
(a) a person (initial transferor