Aviation Fuel Supply Company Limited v CIR – nature of compensation payment – capital or revenue

Aviation Fuel Supply Company Limited v CIR – natu...

Tax alert - Issue 2, January 2013  

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Aviation Fuel Supply Company Limited v CIR – nature of compensation payment – capital or revenue

In a further win for taxpayers, the Court of Appeal upheld the decision of the Court of First instance that a payment was not earned from the carrying on of business and was not taxable. The Court of Appeal handed down its judgement in Aviation Fuel Supply Company v CIR on 4 December 2012, finding in favour of the taxpayer. The case concerned whether a lump sum received by AFSC when its franchise agreement with the Airport Authority was terminated was subject to Hong Kong profits tax.

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