The Asia-Pacific Journal of Taxation (APJT) is a joint effort between the Taxation Institute of Hong Kong and the School of Accounting and Finance of The Hong Kong Polytechnic University.

It publishes research papers, commentary notes, book reviews and articles that address significant issues in the field of taxation relevant to Hong Kong, China and the Asian Pacific region.

The APJT aims to provide quality service to the readership by making its content ore informative and thorough, and by striking a proper balance between professionalism and intellectual stimulation.

The APJT normally publishes two issues every year.

Feature Articles

HK Technical Column(s)
Volume 26, Number 1
A Review of Recent Board of Review Cases (July 2022)


Joint Editors

Jody Wong
The Hong Kong Polytechnic University
Percy Wong
The Hong Kong Polytechnic University
Philip Hung
The Taxation Institute of Hong Kong
Kelvin Mak
The Taxation Institute of Hong Kong
Webster Ng
The Taxation Institute of Hong Kong

Editorial Consultants

Nancy Su
The Hong Kong Polytechnic University
Nigel Eastaway
MHA MacIntyre Hudson
Michael Olesnicky
Charles Swenson
University of Southern California, USA
Daniel Thornton
Queen's University, Canada
Jefferson VanderWolk
Squire Patton Boggs, USA
Marcellus Wong
AMTD Group
AMTD Group

Editorial Board Members

Brian Andrew
University of Wollongong
Wilson Cheng
Ernst & Young Tax Services Limited
Cheng Chi
KPMG, China
Sarah Chin
Deloitte Touche Tohmatsu, HK
Jeremy Choi
PricewaterhouseCoopers, HK
Spencer Chong
PricewaterhouseCoopers, HK
Wilson Chow
The University of Hong Kong
Daniel Ho
Hong Kong Baptist University
Patrick Ho
FTMS Training System Limited
Simon James
University of Exeter
Jeyapalan Kasipillai
Monash University Malaysia
Betty Kwok
The Hang Seng University of Hong Kong
Patrick Kwong
Ernst & Young Tax Services Limited
David Lai
Hong Kong University of Science and Technology
Stephen Lee
Sinotax Services Limited
Thomas Lee
Thomas Lee & Partners
Tak Yan Leung
Rajagiri Business School
Poh Eng Hin
Nanyang Technology University
Anthony Tam
Kalloe Vinod
KPMG, Netherlands
Fergus Wong
PricewaterhouseCoopers, HK
Chris Xing
KPMG, China
Eugene Yeung
KPMG, China

Letters From The Editors

The lnland Revenue Department mass dispatched the tax returns for individuals for the year of assessment 2012/22 on 1 June 2022. Following the passage of the Revenue (Tax Concessions) Bill 2022 on 6 April 2022, the following tax concessions proposed by the Government in the 2022/23 Budget have come into effect: tax rebates of 2021/22 final tax of profits tax, salaries tax and tax under personal assessment subject to a capped amount of $10,000 per case, and the long-awaited tax break on deduction for eligible domestic rent from the year of assessment 2022/23. The annual ceiling of such deductions is $100,000. As the implementation of such tax concessions is required to go through the relevant legislative process upon the passage of the relevant bill, it is expected that the domestic rent deduction, if any, would impact eligible taxpayers’ 2022/23 provisional taxes.

Meanwhile, with the prime fiscal objective to promote the development of Hong Kong as a prime family office hub in Asia by attracting family offices to domicile in Hong Kong, the relevant government offices and units have completed an industry consultation and are formulating legislative proposals to provide profits tax exemption for Family-owned Investment Holding Vehicles' (FIHV) assessable profits derived from qualifying transactions. Subject to the passage of the amendment bill, such a tax concession will take effect on or after 1 April 2022.

On 2 June 2022, the HKSAR Government published the Inland Revenue (Amendment) (Tax Concessions for Certain Shipping-Related Activities) Bill 2022 in the Gazette. As well as shipping enterprises, the shipping service industry compromises a collection of other companies of various activities within the maritime business ecosystem. For example, ship agencies, ship management, and ship broking companies (collectively called shipping commercial principals) are instrumental in supporting shipping activities locally and internationally. With a fiscal objective to foster the growth of shipping business in Hong Kong and develop it as an international maritime centre, this amendment bill gives half-rate profits tax concessions to qualifying shipping commercial principals that carry out qualifying activities for an associated shipping enterprise. This provides a fiscal incentive to attract shipping businesses to set up related maritime business establishments in Hong Kong.

During the first half of 2022, the relevant authorities in mainland China issued circulars and notices to provide guidance on corporate income tax policies. On 25 May 2022, the Ministry of Finance and the State Taxation Administration issued a Cai Shui [2022] No. 19 notice granting preferential corporate income tax policies for the Hengqin Guangdong-Macao Deep Cooperation Zone. For qualifying enterprises in specified industries comprising tourism, modern service industries, new and advanced technology industries (e.g., artificial intelligence, unmanned vehicles, etc.), tax breaks include a reduced corporate income tax rate of 15 per cent, accelerated tax depreciation deductions for newly acquired fixed assets (excluding building structures) and intangibles, and tax exemptions for income derived from outbound investments outside mainland China.

In the Asia Pacific region, for the purpose of implementing the goods and services tax (GST) rate increase (from 7 to 8 per cent) on 1 January 2023, the Inland Revenue Authority of Singapore (IRAS) published an e-Tax Guide in February 2022 on transitional rules to aid GST-registered businesses to properly prepare for the first rate change (in fact, the Minister for Finance announced that the GST rate would be increased from 8 to 9 per cent with effect from 1 January 2024).

The Board of Taxation in Australia started a policy framework review for the taxation of digital assets and transactions in Australia in March 2022, scheduled for completion by the end of 2022.

On the international tax front, on 14 March 2022 the G20/OECD Inclusive Framework on BEPS published additional technical guidance (with illustrative examples) on the 15 per cent global minimum tax. It elaborates on the application and operation of the Global Anti-Base Erosion (GloBE) rules agreed and released late last year.

The consultation period regarding the implementation of the OECD Pillar 2 in UK domestic legislation (the consultation) has officially ended. The Treasury Minister of State, Financial Secretary Rt Hon Lucy Frazer in an open letter to the respondents of the consultation mentioned that the draft legislation will be published in the summer of this year. To ensure the best interests of the state, it has been tentatively scheduled that the UK Pillar 2 legislation will first apply to accounting periods beginning on or after 31 December 2023.

This issue of the Journal includes articles contributed by authors from practice and academia. In the Hong Kong Tax column, we have an article on the recent Board of Review cases. There is also an article that discusses the issues of this, with examples of the new law amendments concerning corporate amalgamations. In the PRC Tax column, we have an article that addresses and highlights the latest development in transfer pricing in mainland China. The International Tax column has an article that discusses the challenges in coordination between local legislation and the Pillar 2 rules.  In the Belt and Road column, we have a featured article highlighting the role and values that the Republic of Korea could offer in our Belt and Road sequel. Lastly, the Institute’s budget proposals and commentary for 2022/23 are presented in the Budget column.

Our heartfelt thanks go to the authors for their dedication and effort in contributing to the articles published in this volume. We are grateful to the reviewers for their valuable comments. Lastly, we wish to express our gratitude for the continuing support we receive from our readers, which is a key impetus in our ongoing efforts to streamline our work and shape the Journal. We gladly welcome any comments and critiques you may have as a reader. Letters to the editors are also very much encouraged and will be considered for publication on our website or in print.


The Joint Editors

July 2022