Tuesday, 26 January 2016

Hong Kong Updates- Personal Data Protection & Taxation – Group Loss Relief?

Personal Data Protection
A further conviction has been handed down (end-December 2015) for breaches of the direct marketing provisions under the Hong Kong Personal Data (Privacy) Ordinance (PDPO), following the first three such convictions in previous months. Although the fine was nominal (at HK$5,000) and although one of the accused was convicted, the case was significant in that it was the first conviction against an individual for unauthorised  transfer of personal data to a third party for use in direct marketing.

Taxation – Group Loss Relief?
The Hong Kong Inland Revenue Department (IRD) has issued a guidance note about the tax treatment of profits in a court-free amalgamation, a procedure introduced by the new Companies Ordinance which became effective in 2014. No amendments have yet been made to the corresponding (Inland Revenue) ordinance to cover this, and nor has Hong Kong historically given group relief for losses. The guidance note goes some way to removing the uncertainties this situation has produced.

In (very) brief, losses in a company may be carried forward into the merged or amalgamated entity provided that the IRD are satisfied that the intention behind the amalgamation is not to obtain the loss relief.

Need more information?
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John Barclay -Email
Teresa Tam - Email 
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Primasia Corporate Services Limited
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