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(CHAPTER 112)CONTENTS

(CHAPTER 112)CONTENTS (Replaced 43 of 1989 s. 11) 41. Election for personal assessment (1) Subject to subsection (1A), an individual- (a) of or above the age of 18; and (b) who is or, if he or she is married, whose spouse is either a permanent or temporary resident, may elect for personal assessment on his or her total income in accordance with this Part. (Replaced 43 of 1989 s. 12) (1A) Where- (a) an individual is married and not living apart from his or her spouse; and (b) both that individual and his or her spouse- (i) have income assessable under this Ordinance; and (ii) are eligible to make an election under subsection (1), then that individual may not make such an election unless his or her spouse does so too. (Added 43 of 1989 s. 12) (2) Where an individual is deceased an executor shall have the same right to elect for personal assessment on the total income of the deceased as the deceased would have if he were alive. (Replaced 35 of 1965 s. 23.

Amended 71 of 1983 s. 20; 43 of 1989 s. 12) (2A) Where- (a) a deceased individual, or his executor on his behalf, elected, or is deemed to have elected, to be personally assessed for the year of assessment in which the deceased died; and (b) that individual was a partner in a partnership; and (c) that individual had a share of the partnership assessable profits or losses in the year of assessment following that in which he died, then his executor may claim to have that share of such assessable profits or losses computed in accordance with Part IV included in the deceased's total income for the year of assessment in which he died. (Added 7 of 1975 s. 29) (3) Any election under this sections shall be made in writing and lodged with the Commissioner not later than 2 years after the end of the year of assessment in respect of which the election is made or 1 month after an assessment of income or profits forming part of the individual's total income for such year of assessment becomes final and conclusive under section 70, whichever is the later. (Amended 2 of 1971 s. 31) (4) In this section- "permanent resident" means an individual who ordinarily resides in Hong Kong; (Amended 7 of 1986 s. 12) "temporary resident" means an individual who stays in Hong Kong for a period or a number of periods amounting to more than 180 days during the year of assessment in respect of which the election is made or for a period or periods amounting to more than 300 days in 2 consecutive years of assessment one of which is the year of assessment in respect of which the election is made.

(Replaced 36 of 1955 s. 47. Amended 71 of 1983 s. 20; 7 of 1986 s. 12) 42. Calculation of total income (1) For the purposes of this Part the total income of an individual for any year of assessment shall, subject to subsection (8), be the aggregate of the following amounts- (a) (i) in respect of the years of assessment up to and including the year of assessment commencing on 1 April 1982 and in a case mentioned in section 5B (5), the sum which is equivalent to that part of the net assessable value as ascertained in accordance with sections 5 (1A) and 5A on which any property tax is chargeable on the individual which represents proportionately the part or parts of the land or buildings or land and buildings in respect of which the property tax is chargeable which have been let for any period during the year of assessment, taking into account both the area or areas let and the period or periods of letting; (Amended 76 of 1975 s. 9; 8 of 1983 s. 12) (ii) in respect of the years of assessment commencing on or after 1 April 1983, the sum equivalent to the net assessable value as ascertained in accordance with sections 5 (1A) and 5B; (Added 8 of 1983 s. 12) (b) the net assessable income of the individual for that year of assessment; and (Replaced 71 of 1983 s. 21) (c) the assessable profits of the individual for that year of assessment computed in accordance with Part IV: (d) (Repealed 17 of 1989 s. 10) Provided that there shall be deducted from that part of the total income arising from paragraph (a) the amount of any interest payable on any money borrowed for the purpose of producing that part of the total income where the amount of such interest has not been allowed and deducted under Part IV. (Amended 17 of 1989 s. 10) (2) There shall be deducted from the total income of an individual for any year of assessment- (a) subject to subsections (3) and (4), the aggregate of approved charitable donations which are made during the year of assessment by the individual and his or her spouse, if such aggregate of donations is not less than $100; and (b) the amount of the individual's loss or share of loss for that year of assessment computed in accordance with Part IV.

(3) An individual shall not be entitled under subsection (2) (a) to deduct for any year of assessment any sum which is allowable as a deduction under section 16, 16B, 16C or 16D or which has been allowed to the individual's spouse against total income that is required to be aggregated with that of the individual under section 42A (1).

(4) The total amount- (a) of any sum which is allowable as a deduction under subsection (2) (a); and (b) any sum which is allowable as a deduction under section 16D, shall not exceed 10% of the total amount of- (i) the total income of the individual for the year of assessment; and (ii) any sum which is allowable as a deduction under section 16D.

(5) Where in any year of assessment the amount of an individual's loss under subsection (2) (b) exceeds that individual's total income, after making the deductions under subsection (2) (a), the amount of such excess shall be carried forward and set off against the individual's total income for future years of assessment: Provided that, in a case where the total incomes of spouses are required to be aggregated under section 42A (1), any such excess for either spouse shall, before being carried forward and set off under this subsection, be reduced as far as can be done by being set off against the total income of the other spouse as reduced under subsection (2).

(6) The proviso to subsection (5) shall apply, with any necessary modifications, in relation to an individual who has elected to be personally assessed under this Part and to his or her spouse where- (a) by reason of the application of section 41 (1A), that individual could not have so elected unless his or her spouse did so too, had his or her spouse had income assessable under this Ordinance; and (b) for this reason only he or she was able so to elect, as if the total income of both spouses had been required to be aggregated under section 42A (1). (Replaced 43 of 1989 s. 13) (7) The amount of any excess set off under subsection (5) against an individual's total income or that of the individual's spouse for any year of assessment shall not be set off for any other year of assessment.

(8) For the purposes of this Part the total income of an individual for any year of assessment shall not include the profits or losses or share of profits or losses of that individual as a member of any partnership (other than a partnership referred to in section 345 (2) of the Companies Ordinance (Cap. 32)) consisting, at any time in that year of assessment, of more than 20 partners. (Amended 51 of 1978 s. 9) (9) For the purposes of subsection (8), in calculating the number of partners in a partnership there shall be included every partner in any other partnership which is itself a partner in the first-mentioned partnership.

(10) Where an election is made by a husband and wife under section 41 (1A) the total income (as reduced under subsections (2) and (5)) of each of them shall be separately calculated under this section before both incomes are aggregated under section 42A. (Replaced 43 of 1989 s. 13) (Replaced 7 of 1975 s. 30. Amended 71 of 1983 s. 21; 43 of 1989 s. 13) 42A. Assessment to tax (1) In giving effect to an election under section 41 the assessor shall make a single assessment- (a) in the sum of the total income, as reduced under section 42 (2) and (5), of the individual making the election; or (b) in the case of an election under section 41 (1A), in the sum of the joint total income resulting from the aggregation of the total income of the one spouse, as so reduced, with that of the other, as also so reduced, as reduced in each case by such of the allowances prescribed in Part V as may be appropriate.

(2) In the case of an election under section 41 (1A) by a husband and wife who married one another in the year of assessment to which the election relates, they shall be deemed for the purpose of ascertaining their joint total income under subsection (1) (b) to have married at the commencement of that year.

(Replaced 43 of 1989 s. 14) 42B. (Repealed 43 of 1989 s. 14) 43. Rates of charge (1) Tax shall be charged on the amount of the assessment referred to in section 42A (1) at the rates specified in Schedule 2- (a) on the individual; or (b) in the case of a husband and wife making an election under section 41 (1A) on both of them subject to apportionment in the manner prescribed by subsection (2B). (Replaced 43 of 1989 s. 15) (1A) Notwithstanding subsection (1), the amount of tax charged under that subsection shall not in any case exceed the amount which would have been chargeable had the standard rate been charged on the total income (as reduced under section 42 (2) and (5)) or, as the case may be, the joint total income. (Added 65 of 1970 s. 8. Amended 7 of 1975 s. 32; 71 of 1983 s. 24) (2) Any property tax, any salaries tax and any profits tax paid under the provisions of Parts II, III and IV respectively shall, where the relevant amounts on which such taxes were calculated are included in the total income of the person who paid the tax, be set off for the purposes of collection against the tax charged under this Part on that person.

(Replaced 26 of 1969 s. 26. Amended 8 of 1973 s. 11; 8 of 1983 s. 13; 71 of 1983 s. 24; 17 of 1989 s. 12; 43 of 1989 s. 15) (2A) (Repealed 17 of 1989 s. 12) (2B) Any tax chargeable on a husband and wife under subsection (1) (b) in any year of assessment shall be apportioned between them so that each spouse shall, in respect of that year, be charged such proportion of the tax as the total income of that spouse (as reduced under section 42 (2) and (5)) bears to joint total income of the husband and wife. (Replaced 43 of 1989 s. 15) (2C) (Repealed 43 of 1989 s. 15) (3) Where the aggregate of the taxes which may be set off under subsection (2) exceeds the amount of tax charged under this Part, the Commissioner shall, on receipt of a claim from the person charged in the specified form and on being satisfied that the claim is in order, refund such excess to that person. (Added 36 of 1955 s. 50. Amended 26 of 1969 s. 26; 39 of 1969 s. 8; 30 of 1981 s. 8; 71 of 1983 s. 24; 17 of 1989 s. 12; 43 of 1989 s.

15) 43A. (Repealed 19 of 1991 s. 4) PART VIII DOUBLE TAXATION RELIEF (Amended 49 of 1956 s. 32) 44. (Repealed 49 of 1956 s. 33) 45. Relief in respect of Commonwealth income tax (1) If any person resident in Hong Kong who has paid, by deduction or otherwise, or is liable to pay, tax under this Ordinance for any year of assessment on any part of his income, proves to the satisfaction of the Commissioner that he has paid, by deduction or otherwise, or is liable to pay, Commonwealth income tax for that year in respect of the same part of his income, he shall be entitled to relief from tax in Hong Kong paid or payable by him on that part of his income at a rate thereon to be determined as follows- (a) if the Commonwealth rate of tax does not exceed one-half of the rate of tax appropriate to his case under this Ordinance in Hong Kong the rate at which relief is to be given shall be the Commonwealth rate of tax; (b) in any other case the rate at which relief is to be given shall be half the rate of tax appropriate to his case under this Ordinance.

(Amended 30 of 1950 Schedule) (2) If any person not resident in Hong Kong who has paid, by deduction or otherwise, or is liable to pay, tax under this Ordinance for any year of assessment on any part of his income proves to the satisfaction of the Commissioner that he has paid, by deduction or otherwise, or is liable to pay Commonwealth income tax for that year of assessment in respect of the same part of his income, he shall be entitled to relief from tax paid or payable by him under this Ordinance on that part of his income at a rate thereon to be determined as follows- (a) if the Commonwealth rate of tax appropriate to his case does not exceed the rate of tax appropriate to his case under this Ordinance, the rate at which relief is to be given shall be one-half of the Commonwealth rate of tax; (b) if the Commonwealth rate of tax appropriate to his case exceeds the rate of tax appropriate to his case under this Ordinance, the rate at which relief is to be given shall be equal to the amount by which the rate of tax appropriate to his case under this Ordinance exceeds one-half of the Commonwealth tax. (Amended 30 of 1950 Schedule) (3) For the purposes of this section, Commonwealth income tax means any income tax charged under any law in force in any part of the Commonwealth (other than the United Kingdom or Hong Kong) if the legislature of that part of place has provided for relief in respect of tax charged on income both in that part or place and Hong Kong in a manner similar to that provided in this section. (Amended 30 of 1950 Schedule) (4) For the purpose of this section the expression "rate of tax" when applied to tax paid or payable under this Ordinance means the rate determined by dividing the amount of the tax paid or payable for the year (before the deduction of the relief granted under this section) by the amount of the income in respect of which the tax paid or payable under this Ordinance has been charged for that year and the Commonwealth rate of tax shall be computed in a similar manner. (Replaced 49 of 1956 s. 34.

Amended 26 of 1969 s. 27) (5) Where a person is for any year of assessment resident both in Hong Kong and in a part or place in which Commonwealth income tax is charged, he shall for the purposes of this section be deemed to be resident where during that year he resides for the longer period. (Amended 30 of 1950 Schedule.) (6) The expression "income" in this section shall mean income or profits.

(Added 30 of 1950 Schedule. Amended 49 of 1956 s. 34) (Amended 7 of 1986 s. 12) 46. Official secrecy Where, under any law in force in any part of the Commonwealth provision is made for the allowance of relief from income tax in respect of the payment of tax under this Ordinance, the obligation as to secrecy imposed by section 4 of this Ordinance shall not prevent the disclosure to the authorized officers of the government in that part of the Commonwealth of such facts as may be necessary to enable the proper relief to be given in cases where relief is claimed from tax under this Ordinance or from income tax in that part or place aforesaid.

(Amended 30 of 1950 Schedule) 47-48. (Repealed 49 of 1956 s. 35) 49. Double taxation arrangements (1) If the Governor in Council by order declares that arrangements specified in the order have been made with the Government of any territory outside Hong Kong with a view to affording relief from double taxation in relation to income tax and any tax of a similar character imposed by the laws of that territory, and that it is expedient that those arrangements should have effect, the arrangements shall have effect in relation to tax under this Ordinance notwithstanding anything in any enactment. (Amended 7 of 1986 s. 12) (2) (Repealed 49 of 1956 s. 36) (3) On the making of an order under this section with respect to arrangements relating to any territory forming part of the Commonwealth (other than the United Kingdom or Hong Kong), section 45 shall cease to have effect as respects that territory except in so far as the arrangements otherwise provide. (Amended 30 of 1950 Schedule; 7 of 1986 s.

12) (4) Any order made under this section may be revoked by a subsequent order.

(5) Where any arrangements have effect by virtue of this section, the obligation as to secrecy imposed by section 4 shall not prevent the disclosure to any authorized officer of the Government with which the arrangements are made of such information as is required to be disclosed under the arrangements.

(6) The Governor in Council may make rules for carrying out the provisions of any arrangements having effect under this section.

(Amended 49 of 1956 s. 36) 50. Tax credits (1) The provisions of this section shall have effect where, under arrangements having effect under section 49, tax payable in respect of any income in the territory with the Government of which the arrangements are made is to be allowed as a credit against tax payable in respect of that income in Hong Kong; and in this section the expression "foreign tax" means any tax payable in that territory which under the arrangements is to be so allowed and the expression "tax" means tax chargeable under this Ordinance. (Amended 7 of 1986 s. 12) (2) The amount of the tax chargeable in respect of the income shall be reduced by the amount of the credit: Provided that credit shall not be allowed against tax for any year of assessment unless the person entitled to the income is resident in Hong Kong for that year. (Amended 7 of 1986 s. 12) (3) The credit shall not exceed the amount which would be produced by computing the amount of the income in accordance with the provisions of this Ordinance and then charging it to tax at a rate ascertained by dividing the tax chargeable (before allowance of credit under any arrangements having effect under section 49) on the total income of the person entitled to the income by the amount of his total income.

(4) Without prejudice to the provisions of subsection (3), the total credit to be allowed to a person for any year of assessment for foreign tax under all arrangements having effect under section 49 shall not exceed the total tax payable by him for that year of assessment. (Amended 17 of 1989 s. 13) (5) In computing the amount of the income- (a) no deduction shall be allowed in respect of foreign tax (whether in respect of the same or any other income); (b) where the tax chargeable depends on the amount received in Hong Kong, the said amount shall be increased by the appropriate amount of the foreign tax in respect of the income; (Amended 7 of 1986 s. 12) (c) where the income includes a dividend and under the arrangements foreign tax not chargeable directly or by deduction in respect of dividend is to be taken into account in considering whether any, and if so what, credit is to be given against tax in respect of the dividend the amount of the income shall be increased by the amount of the foreign tax not so chargeable which falls to be taken into account in computing the amount of the credit, but notwithstanding anything in the preceding provisions of this subsection a deduction shall be allowed of any amount by which the foreign tax in respect of the income exceeds the credit therefor.

(6) Subsection (5) (a) and (b) (but not the remainder thereof) shall apply to the computation of total income for the purposes of determining the rate mentioned in subsection (3), and shall apply thereto in relation to all income in the case of which credit falls to be given for foreign tax under arrangements for the time being in force under section 49.

(7) Where- (a) the arrangements provide, in relation to dividends of some classes, but not in relation to dividends of other classes, that foreign tax not chargeable directly or by deduction in respect of dividends is to be taken into account in considering whether any, and if so what, credit is to be given against tax in respect of the dividends; and (b) a dividend is paid which is not of a class in relation to which the arrangements so provide, then, if the dividend is paid to a company which controls, directly or indirectly not less than one-half of the voting power in the company paying the dividend, credit shall be allowed as if the dividend were a dividend of a class in relation to which the arrangements so provide.

(8) Credit shall not be allowed under the arrangements against tax chargeable in respect of the income of any person for any year of assessment if he elects that credits shall not be allowed in the case of his income for that year.

(9) Any claim for an allowance by way of credit shall be made not later than 2 years after the end of the year of assessment, and in the event of any dispute as to the amount allowable the claim shall be subject to objection and appeal in like manner as an assessment.

(10) Where the amount of a credit given under the arrangement is rendered excessive or insufficient by reason of any adjustment of the amount of any tax payable either in Hong Kong or elsewhere, nothing in this Ordinance limiting the time for the making of assessments or claims for relief shall apply to any assessment or claim to which the adjustment gives rise, being an assessment or claim made not later than 2 years from the time when all such assessments, adjustments and other determinations have been made, whether in Hong Kong or elsewhere, as are material in determining whether any and if so what credit falls to be given. (Amended 7 of 1986 s. 12) PART IX RETURNS, ETC.

51. Returns and information to be furnished (1) An assessor may give notice in writing to any person requiring him within a reasonable time stated in such notice to furnish any return which may be specified by the Board of Inland Revenue for property tax, salaries tax or profits tax under Parts II, III, IV, XA, XB and XC, containing such particulars and in such form as may be specified by the Board of Inland Revenue. (Amended 35 of 1965 s. 26; 39 of 1969 s. 9; 8 of 1973 s. 12; 7 of 1975 s. 33; 8 of 1983 s. 14; 17 of 1989 s. 14; 43 of 1989 s. 16) (2) Every person chargeable to tax for any year of assessment shall inform the Commissioner in writing that he is so chargeable not later than 4 months after the end of the basis period for that year of assessment unless he has already been required to furnish a return under the provisions of subsection (1). (Replaced 49 of 1956 s. 37) (2A) An assessor shall give notice to any individual who has elected to be personally assessed under Part VII requiring that individual within a reasonable time stated in the notice to furnish a return in the specified form of his total income assessable under this Ordinance. (Added 43 of 1989 s. 16) (2B) Where a notice is required to be given under subsection (2A) to an individual who is married and not living apart from his or her spouse- (a) such notice shall be given to both that individual and his or her spouse; and (b) they shall be required to furnish a return of their joint total income assessable under this Ordinance. (Added 43 of 1989 s. 16) (3) An assessor may give notice in writing to any person when and as often as he thinks necessary requiring him within a reasonable time stated in such notice to furnish fuller or further returns respecting any matter of which a return is required or prescribed by this Ordinance.

(4) For the purposes of obtaining full information in regard to any matter which may affect any liability, responsibility or obligation of any person under this Ordinance- (a) an assessor or an inspector may give notice in writing to such person, or to any other person whom he considers may be in possession of information or documents in regard to any such matter as aforesaid, requiring him within such reasonable time as is stated in the notice to furnish all information in his possession respecting any such matter, and to produce for examination any deeds, plans, instruments, books, accounts, trade lists, stock lists, vouchers, bank statements or other documents which the assessor or inspector giving the notice considers are or may be relevant for the purpose aforesaid: Provided that in the case of a notice under this paragraph requiring the production of any account kept by a solicitor and relating to the affairs of any client or clients of his, production of a copy of all relevant entries therein respecting any matter upon which information is sought shall be a sufficient compliance with the aforesaid requirement of the notice if the copy is certified by the solicitor as being a correct copy of all relevant entries in such account respecting the matter aforesaid; (b) an assistant commissioner may give notice in writing to such person, or to such other person, requiring him, at a time and place to be named by the assistant commissioner, to attend and be examined, and upon such examination to answer truthfully all questions put to him, respecting any such matter as aforesaid. (Replaced 35 of 1965 s. 26. Amended 40 of 1972 s. 4) (4A) For the avoidance of doubt it is hereby declared that the powers conferred by subsection (4) include the power to require information from, and to require the attendance for the purpose of being examined of, - (a) any person, or any employee of any person, who was a party to any particular land or property transaction; (b) any person, or any employee of any person, who has acted for or is acting for any party to any particular land or property transaction; (c) any person who either paid or received, directly or indirectly, any consideration, brokerage, commission or fee in respect of or in connection with any particular land or property transaction; and (d) any person, or any employee of any person, who was concerned in the passing of any consideration, brokerage, commission or fee, or in the clearing or collection of any cheque or other instrument of exchange, respecting any particular land or property transaction, as to any of the following matters, that is to say- (i) the full names (including aliases) and addresses of any of the persons referred to in paragraphs (a) to (d) and any other information in his possession which may be helpful in identifying or locating any such persons; (ii) any consideration, brokerage, commission or fee paid or received in respect of or in connection with any such land or property transaction; and (iii) the terms and conditions of any such land or property transaction, and the existence in respect of any communication, whether oral or written, of privilege from disclosure shall not constitute any excuse for the nondisclosure of information as to any of the matters specified in paragraphs (i) to (iii) where disclosure thereof is required from any of the persons referred to in paragraphs (a) to (d), but except as aforesaid nothing in subsection (4) shall require disclosure by counsel or solicitor of any privileged information or communication given or made to him in that capacity. (Added 35 of 1965 s. 26) (4B) (a) Any person who without reasonable excuse, the burden of proof whereof shall lie upon him, fails to comply with the requirements of a notice given to him under subsection (4) (a) or fails to attend in answer to a notice issued under subsection (4) (b) or having attended fails to answer any questions put to him, being questions which under that paragraph may be put to him, shall be liable to a penalty of $5,000 recoverable under section 75 as a civil debt due to the Crown: (Amended 11 of 1985 s. 3) provided that- (i) the Commissioner may compound any such penalty and may before judgement in proceedings therefor stay or compound such proceedings, or may refuse to accept payment of such penalty or any part thereof except under a judgement of the court in proceedings for the recovery thereof; (ii) the court before which any proceedings for such penalty are brought may, if it thinks fit, give judgement for a less amount.

(b) In addition to giving judgement for the penalty or any less amount as aforesaid, the court may order the person against whom the proceedings were brought to do, within a time specified in the order, the act which he has failed to do. (Added 35 of 1965 s. 26) (5) A return, statement, or form purporting to be furnished under this Ordinance by or on behalf of any person shall for all purposes be deemed to have been furnished by that person or by his authority, as the case may be, unless the contrary is proved, and any person signing any such return, statement, or form shall be deemed to be cognizant of all matters therein.

(6) Any person who ceases to carry on any trade, profession or business or who ceases to own any source of income or to be the owner of any land or buildings or land and buildings in respect of which tax is chargeable under the provisions of Part II, III, IV or VII shall so inform the Commissioner in writing within 1 month of such cessation. (Replaced 49 of 1956 s. 37; 8 of 1983 s. 14) (7) Any person chargeable to tax under Part III, IV or VII who is about to leave Hong Kong for any period exceeding 1 month shall give notice in writing to the Commissioner of his expected date of departure, and if he intends to return to Hong Kong the approximate date of his return. Such notice shall be given not later than 1 month before the expected date of departure: Provided that- (a) the Commissioner may accept such shorter notice as he may deem reasonable; and (b) this subsection shall not apply in the case of an individual who is required in the course of his employment, business or profession to leave Hong Kong at frequent intervals. (Added 49 of 1956 s. 37. Amended 7 of 1986 s. 12) (8) Any person chargeable to tax under Part II, III, IV or VII who changes his address shall within 1 month inform the Commissioner in writing of the particulars of the change. (Added 2 of 1971 s. 33. Amended 8 of 1983 s.

14) (9) (Repealed 43 of 1975 s. 2) 51A. Power to require statement of assets and liabilities, etc.

(1) Where the Commissioner or the deputy commissioner is personally of the opinion that a person has made an incorrect return or supplied false information having the effect of understating his income or profits chargeable to tax and has done so without reasonable excuse and not through an innocent oversight or omission, the Commissioner may, with the consent of the Board of Review, give notice in writing to such person requiring him to furnish within the time limited by such notice, not being less than 30 days from the date of service of the notice, a statement containing particulars of- (Amended 43 of 1975 s. 3; L. N. 377 of 1980) (a) all assets which the person or his spouse possessed in Hong Kong, including any possessed jointly or severally with any other person, at such times as may be specified in the notice; and (b) all liabilities to which the person or his spouse was subject in Hong Kong, including any to which he was subject jointly or severally with any other person, at such times as may be specified in the notice; and (c) all expenditure or disbursements from funds in Hong Kong, including remittances overseas and gifts, incurred or made by the person or his spouse during such periods as may be specified in the notice; and (d) all sums, including remittances, gifts and legacies received in Hong Kong by the person or his spouse during such periods as may be specified in the notice. (Amended 71 of 1983 s. 26; 7 of 1986 s. 12) (2) A notice given under subsection (1) shall not specify any time or period earlier than 7 years before the commencement of the year of assessment in which it is given.

(3) An application for the consent of the Board of Review shall be made in writing by the Commissioner to the clerk of the Board and shall be accompanied by a statement of the material on the basis of which it is proposed to exercise the powers of the Commissioner or deputy commissioner under subsection (1).

(4) Upon receipt of an application under subsection (3), the Chairman of the Board of Review shall appoint 3 members from the panel of the Board of Review, one of whom shall be the Chairman or a deputy chairman, to consider the application.

(5) When the Board is considering an application, the Commissioner or his authorized representative may attend, but the person in respect of whom the application is made may not attend.

(6) Subject to subsection (7), neither in the application nor on the consideration thereof shall the identity of the person in respect of whom the application is made be revealed to the Board of Review.

(7) If the person on whom a notice under subsection (1) has been given so requests, the Commissioner shall furnish him with a certificate from the Chairman or deputy chairman of the Board of Review certifying that the Board's consent to the issue of the notice was given, and for the purpose of obtaining such a certificate the Commissioner shall reveal to the chairman or deputy chairman the identity of that person.

(8) The decision of the Board of Review to grant or refuse consent shall be final. (Added 26 of 1969 s. 28. Amended 40 of 1972 s. 5; 43 of 1975 s.

3) 51B. Power to issue search warrant (1) If the Commissioner, or an officer of the Inland Revenue Department not below the rank of chief assessor authorized in writing by the Commissioner for the purpose (in this section referred to as the authorized officer), satisfies a magistrate, by statement made on oath, - (a) that there are reasonable grounds for suspecting that a person has made an incorrect return or supplied false information having the effect of understating his income or profits chargeable to tax and has done so without reasonable excuse and not through an innocent oversight or omission; or (b) that a person has failed to comply with an order of a court made under section 80 (1) directing him to comply with the requirements of a notice given to him under section 51 (1) or (3), the magistrate may by warrant authorize the Commissioner or authorized officer to exercise the following powers- (i) without previous notice at any reasonable time during the day, to enter and have free access to any land, buildings, or place where he suspects there to be any books, records, accounts or documents of that person, or of any other person, which may afford evidence material in assessing the liability of the first-mentioned person for tax, and there to search for and examine any books, records, accounts or documents; (Amended 43 of 1975 s. 4) (ii) in carrying out any such search, to open or cause to be removed and opened, any article in which he suspects any book, records, accounts or documents to be contained; (iii) to take possession of any books, records, accounts or documents of that person or that person's spouse, and to make copies of such parts of any books, records, accounts or documents of any other person, as may afford evidence material in assessing the liability of the first-mentioned person for tax; (Replaced 43 of 1975 s. 4. Amended 71 of 1983 s. 27) (iv) to retain any such books, records, accounts or documents for as long as they may be reasonably required for any assessment to be made or for any proceedings under this Ordinance to be completed; Provided that if the Commissioner or authorized officer shall retain any book, record, account or document for a period of more than 14 days, the person aggrieved may apply in writing to the Board of Review for an order directing the return thereof and the Board of Review, after hearing the applicant or his authorized representative and the Commissioner or his representative, may so order, either unconditionally or subject to any condition which the Board may consider it proper to impose. (Amended 7 of 1975 s. 34) (1A) Any officer of the Inland Revenue Department under the direction of the Commissioner or an authorized officer may assist the Commissioner or an authorized officer in the execution of a warrant issued under subsection (1) and may exercise any of the powers referred to in subsection (1) (i), (ii) and (iii). (Added 40 of 1972 s. 6) (2) When exercising any power under subsection (1), the Commissioner or authorized officer shall produce on demand the warrant issued to him under that subsection.

(3) The person to whose affairs any books, records, accounts or documents taken possession of under subsection (1) relate shall be entitled to examine and make extracts from them at such times and under such conditions as the Commissioner may determine.

(4) Any person who obstructs or hinders the Commissioner or an authorized officer acting in the discharge of his duty under subsection (1) or an officer assisting him under subsection (1A) shall be guilty of an offence: Penalty a fine of $2,000 and imprisonment for 6 months.

(Added 26 of 1969 s. 28. Amended 40 of 1972 s. 6) 51C. Business records to be kept (1) Subject to subsection (2), every person carrying on a trade, profession or business in Hong Kong shall keep sufficient records in the English or Chinese language of his income and expenditure to enable the assessable profits of such trade, profession or business to be readily ascertained and shall retain such records for a period of not less than 7 years after the completion of the transactions, acts or operations to which they relate. (Amended 7 of 1986 s. 12) (2) Subsection (1) shall not require the preservation of any records- (a) which the Commissioner has specified need not be preserved; or (b) of a corporation which has been dissolved.

(Added 26 of 1969 s. 28) 51D. Rent records to be kept (1) Subject to subsection (2), every person who is the owner of land or buildings or land and buildings situated in Hong Kong shall keep sufficient records in the English or Chinese languages of the consideration, in money or money's worth, payable or deemed to be payable to him, to his order or for his benefit on or after 1 April 1983 in respect of the right of use of that land or buildings or land and buildings to enable the assessable value of that land and buildings to be readily ascertained and shall retain such records for a period of not less than 7 years after the completion of the transactions, acts or operations to which they relate.

(2) Subsection (1) shall not require the preservation of any records- (a) which the Commissioner has specified need not be preserved; or (b) of a corporation which has been dissolved.

(Added 8 of 1983 s. 15) 52. Information to be furnished by officials and employers (1) The Commissioner may give notice in writing to any officer in the employment of the Government or of any public body requiring him within a reasonable time stated in such notice to furnish any particulars which he may require for the purposes of this Ordinance which may be in the possession of such officer: Provided that no such officer shall by virtue of this section be obliged to disclose any particulars as to which he is under any express statutory obligation to observe secrecy.

(2) Every person who is an employer shall, when required to do so by notice in writing given by an assessor, furnish within a reasonable time stated in such notice a return containing the names and places of residence and the full amount of the remuneration, whether in cash or otherwise, for the period specified in the notice, of- (a) all persons employed by him in receipt of remuneration in excess of a minimum figure to be fixed by the assessor; and (b) any other person employed by him named by the assessor.

(3) For the purposes of this section, any director of a company, or person engaged in the management of a company, shall be deemed to be a person employed by the company. (Amended 7 of 1986 s. 9) (4) Where any person who is an employer commences to employ in Hong Kong an individual who is or is likely to be chargeable to tax under Part III, or any married person, he shall give notice thereof in writing to the Commissioner not later than 3 months after the date of commencement of such employment, stating the full name and address of the individual, the date of commencement and the terms of employment. (Added 49 of 1956 s.

38, Amended 7 of 1986 s. 9; 43 of 1989 s. 17) (5) Where any person who is an employer ceases or is about to cease to employ in Hong Kong an individual who is or is likely to be chargeable to tax under Part III, or any married person, he shall give notice thereof in writing to the Commissioner not later than 1 month before such individual ceases to be employed in Hong Kong, stating the name and address of the individual and the expected date of cessation: (Amended 7 of 1986 s. 9; 43 of 1989 s. 17) Provided that the Commissioner may accept such shorter notice as he may deem reasonable. (Added 49 of 1956 s. 38) (6) The employer of any individual who is chargeable to tax under Part III and is about to leave Hong Kong for any period exceeding 1 month shall give notice in writing to the Commissioner of the expected date of departure of such individual. Such notice shall be given not later than 1 month before the expected date of departure: Provided that- (a) the Commissioner may accept such shorter notice as he may deem reasonable; and (b) this subsection shall not apply in the case of an individual who is required in the course of his employment to leave Hong Kong at frequent intervals. (Added 49 of 1956 s. 38) (7) An employer who is required by subsection (6) to give notice to the Commissioner of the expected departure of an individual shall not, in the case of an individual whom he has ceased, or is about to cease, to employ in Hong Kong, except with the consent in writing of the Commissioner or in the case of money paid to the commissioner on the direction of the individual, make any payment of money or money's worth to or for the benefit of the individual for a period of 1 month from the date on which he gave the notice; and compliance with this subsection shall constitute a defence in any proceedings against an employer in respect of his failure to make any payment to or for the benefit of the individual during the said period. (Added 26 of 1969 s. 29. Amended 2 of 1971 s. 34) (8) Notwithstanding anything to the contrary in subsections (4) and (5) an employer shall not be required to give notice under those subsection in respect of a married person if he has reasonable grounds for believing that neither that person nor his or her spouse are, or are likely to be, chargeable to tax under Part III. (Added 7 of 1986 s. 9. Amended 43 of 1989 s. 17) (Amended 7 of 1986 s. 12) 53. Who may act for incapacitated or non-resident persons An act or thing required by or under this Ordinance to be done by any person shall, if such person is an incapacitated or non-resident person, be deemed to be required to be done by the trustee of such incapacitated person or by the agent of such non-resident person, as the case may be.

54. Liability of executor of deceased taxpayer The executor of a deceased person shall be chargeable with the tax for all periods prior to the date of such person's death with which the said person would be chargeable if he were alive, and shall be liable to do all such acts, matters or things as the deceased person if he were alive would be liable to do under this Ordinance: Provided that- (a) no proceedings, other than an assessment to additional tax under section 82A, shall be instituted against the executor under the provisions of Part XIV in respect of any act or default of the deceased person; (Amended 43 of 1975 s. 5) (b) no assessment or additional assessment in respect of a period prior to the date of such person's death shall be made after the expiry of 1 year from such date of death, or 1 year from the date of filing any affidavit required under the Estate Duty Ordinance (Cap. 111), whichever is the later. (Amended 26 of 1969 s. 30) 55. (Repealed 49 of 1956 s. 39) 56. Precedent partner to act on behalf of partnership (1) Wherever 2 or more persons in partnership act as agents, or are employers, or are persons in receipt of profits or act in any other capacity whatever, either on behalf of themselves or of any other person, the precedent partner of such partnership shall be answerable for doing all such acts, matters and things as would be required to be done under the provisions of this Ordinance by an individual acting in such capacity: (Amended 49 of 1956 s. 40) Provided that any person to whom a notice has been given under the provisions of this Ordinance as precedent partner of a partnership shall be deemed to be the precedent partner thereof unless he proves that he is not a partner in such partnership, or that some other person resident in Hong Kong is the precedent partner thereof. (Amended 7 of 1986 s. 12) (2) Where 2 or more persons who are not in partnership act jointly in any capacity mentioned in subsection (1), they shall be jointly and severally answerable for doing all such acts, matters, and things as would be required to be done under the provisions of this Ordinance by an individual acting in such capacity.

56A. Joint owners and co-owners (1) Where 2 or more persons are joint owners or owners in common of any land or buildings or land and buildings, any of those persons appearing from any deed, conveyance, judgement or other instrument in writing registered in the Land Registry under the Land Registration Ordinance (Cap. 128) to be such an owner shall be answerable for doing all such acts, matters and things as would be required to be done under the provisions of this Ordinance by a sole owner. (Amended 56 of 1992 s. 20; 8 of 1993 s. 2) (2) Nothing in subsection (1) shall relieve any person of any obligation under this Ordinance or affect any right and obligation of joint owners or owners in common as between themselves.

(3) Where any person pays property tax under subsection (1) and that person is not, apart from that subsection, liable to that tax or part of it, that person may recover from any other person that tax or part of it to which that other person, apart from that subsection, is liable under this Ordinance.

(Added 8 of 1983 s. 16) 57. Principal officer to act on behalf of a corporation or body of persons (1) The secretary, manager, any director or the liquidator of a corporation and the principal officer of a body of persons shall be answerable for doing all such acts, matters, or things as are required to be done under the provisions of this Ordinance by such corporation or body of persons.

(2) If no secretary, manager, director or liquidator of a corporation or no principal officer of a body of persons is ordinarily resident in Hong Kong, the corporation or body of persons, as the case may be, shall inform the Commissioner, and keep him so informed at all times, of the name and address of an individual ordinarily resident in Hong Kong who shall be answerable for doing all such acts, matters, or things as are required to be done under the provisions of this Ordinance by such corporation or body of persons. (Amended 7 of 1986 s. 12) (Replaced 2 of 1971 s. 35) 58. Signature and service of notices (1) Every notice to be given by the Commissioner, an assistant commissioner, an assessor or an inspector under this Ordinance shall bear the name of the Commissioner, assistant commissioner, assessor or inspector, as the case may be, and every such notice shall be valid if the name of the Commissioner, assistant commissioner, assessor or inspector is duly printed or signed thereon. (Replaced 26 of 1969 s. 31) (2) Every notice given by virtue of this Ordinance may be served on a person either personally or by being delivered at, or sent by post to, his last known postal address, place of abode, business or employment or any place at which he is, or was during the year to which the notice relates, employed or carrying on business or the land or buildings or land and buildings in respect of which he is chargeable to tax under Part II: (Amended 49 of 1956 s. 42; 26 of 1969 s. 31; 8 of 1983 s. 17) Provided that a notice of assessment under section 62 shall be served personally or by being sent by registered post (or in the case of an assessment to property tax under Part II either by registered post or by ordinary post) to any such place as aforesaid. (Replaced 30 of 1950 Schedule) (3) Any notice sent by post shall be deemed to have been served on the day succeeding the day on which it would have been received in the ordinary course by post.

(4) In proving service by post it shall be sufficient to prove that the letter containing the notice was duly addressed and posted.

(5) Every name printed or signed on any notice or signed on any certificate given or issued for the purposes of this Ordinance which purports to be the name of the person authorized to give or issue the same shall be judicially noticed.

(6) If a notice given under this Part requires something to be done within a time stated in the notice, the Commissioner or, in the case of a notice given by an assessor, an assessor may by notice in writing extend the time for complying with the notice. (Added 2 of 1971 s. 36) 58A. (Repealed 43 of 1989 s. 18) PART X ASSESSMENTS 59. Assessor to make assessments (1) Every person who is in the opinion of an assessor chargeable with tax under this Ordinance shall be assessed by him as soon as may be after the expiration of the time limited by the notice requiring him to furnish a return under section 51 (1): Provided that the assessor may assess any person at any time if he is of opinion that such person is about to leave Hong Kong, or that for any other reason it is expedient to do so. (Amended 7 of 1986 s. 12) (1A) Notwithstanding subsection (1), where an assessor is of the opinion that an election by an individual under section 41 for personal assessment on his total income would result in a refund becoming due of the whole of the amount which he might lawfully be assessed for property tax if such amount were paid, the assessor shall not be obliged to proceed to make an assessment in respect of that tax. (Added 26 of 1969 s. 32) (1B) Notwithstanding subsection (1), where an assessor is satisfied that- (a) an individual or his or her spouse, not being a spouse living apart from that individual, carries on (not jointly with another person) a trade, profession or business in Hong Kong and the individual is eligible to elect under section 41 for personal assessment on his total income; and (b) the assessable profits of that individual in respect of his trade, profession or business in Hong Kong for any year of assessment do not exceed the amount specified in the second column of item 1 (c) of the Fourth Schedule; and (Amended 32 of 1981 s. 8; 29 of 1982 s. 13; 28 of 1987 s. 6; 28 of 1988 s. 5; 17 of 1989 s. 15; 30 of 1990 s. 4) (c) the individual, and his or her spouse, not being a spouse living apart from that individual, has no income, property, or profits chargeable to tax under this Ordinance for that year of assessment, other than in respect of such trade, profession or business, the assessor shall not be obliged to proceed to make an assessment of profits tax in respect of such assessable profits. (Added 2 of 1971 s. 37.

Amended 7 of 1975 s. 35; 7 of 1986 s. 12; 43 of 1989 s. 19) (1C) Notwithstanding subsection (1), where an assessor is satisfied that- (a) an individual or his or her spouse, not being a spouse living apart from that individual, carries on a trade, profession or business in Hong Kong, either solely or jointly with another person, and the individual is eligible to elect under section 41 for personal assessment on his total income; and (Amended 7 of 1986 s. 12) (b) the individual, and his or her spouse, not being a spouse living apart from that individual, has no income, property or profits chargeable to tax under this Ordinance for any year of assessment, other than in respect of such trade, profession or business; and (c) the assessable profits of the individual or his or her spouse, not being a spouse living apart from that individual, in respect of such trade, profession or business for such year of assessment, or his or her share of those profits if he or she is a partner in the trade, profession or business, are such that if there were an election for personal assessment under section 41 and after taking into account the allowances that would have to be deducted under Part V, no tax would be charged on either of them, (Replaced 71 of 1983 s. 29) the assessor shall not be obliged to proceed to make an assessment of profits tax in respect of such assessable profits and, if he has made such an assessment, he may notwithstanding section 70, annul the assessment or in case of assessment of a partnership may reduce it insofar as it relates to the share of profits of such individual or his or her spouse. (Added 2 of 1971 s. 37. Amended 71 of 1983 s. 29; 43 of 1989 s. 19; 19 of 1991 s.

5) (2) Where a person has furnished a return in accordance with the provisions of section 51 the assessor may either- (Amended 49 of 1956 s.

43) (a) accept the return and make an assessment accordingly; or (b) if he does not accept the return, estimate the sum in respect of which such person is chargeable to tax and make an assessment accordingly; or (Amended 49 of 1956 s. 43) (c) in relation to the years of assessment up to and including the year of assessment commencing on 1 April 1974, if he accepts the return as substantially correct but considers it necessary to make further inquiries on any matter, make immediately a provisional assessment in the amount of the return. (Added 2 of 1971 s. 37. Amended 7 of 1975 s. 35) (3) Where a person has not furnished a return and the assessor is of the opinion that such person is chargeable with tax, he may estimate the sum in respect of which such person is chargeable to tax and make an assessment accordingly, but such assessment shall not affect the liability of such person to a penalty by reason of his failure or neglect to deliver a return. (Amended 49 of 1956 s. 43) (4) In the case of profits from a trade or business, if accounts of such trade or business have not been kept in a satisfactory form, the assessor may assess the profits or income of such trade or business on the basis of the usual rate of net profit on the turnover of such trade or business, and the Board of Inland Revenue may prescribe the amounts of such usual rates of profits in particular classes of trade or business.

59A. Provisional assessments (1) A provisional assessment under section 59 (2) (c) shall be a valid assessment for all purposes except that section 64 (1) shall not apply unless the provisional assessment is confirmed under section 62 (2).

(2) Where it appears to an assessor that a provisional assessment which has not been confirmed under section 62 (2) should be increased or reduced for any year of assessment, the assessor may, in place of such provisional assessment, within the year of assessment or within 6 years after the expiration thereof, assess the person assessed at the amount at which according to his judgement such person ought to have been assessed: Provided that where the under-assessment of any person in a provisional assessment for any year of assessment is due to fraud or wilful evasion, the assessment under this subsection may be made at any time within 10 years after the expiration of that year of assessment. (Added 2 of 1971 s.

38) 60. Additional assessments (1) Where it appears to an assessor that for any year of assessment any person chargeable with tax has not been assessed or has been assessed at less than the proper amount, the assessor may, within the year of assessment or within 6 years after the expiration thereof, assess such person at the amount or additional amount at which according to his judgement such person ought to have been assessed, and the provisions of this Ordinance as to notice of assessment, appeal and other proceedings shall apply to such assessment or additional assessment and to the tax charged thereunder: (Amended 16 of 1951 s. 10; 49 of 1956 s. 44) Provided that- (a) (Repealed 2 of 1971 s. 39) (b) where the non-assessment or under-assessment of any person for any year of assessment is due to fraud or wilful evasion, such assessment or additional assessment may be made at any time within 10 years after the expiration of that year of assessment. (Amended 49 of 1956 s. 44) (2) Where it appears to an assessor that the whole or part of any tax repaid to a person (otherwise than in consequence of an assessment having been determined on objection or appeal) has been repaid by mistake, whether of fact or law, the assessor may, within the year of assessment to which the repayment relates or within 6 years after the expiration thereof, assess such person in the amount of tax so repaid by mistake, and the provisions of this Ordinance as to notice of assessment, objection, appeal and other proceedings shall apply to such assessment and to the tax charged thereunder. (Added 2 of 1971 s. 39) (3) No assessment shall be made under subsection (2) if the repayment was in fact made on the basis of, or in accordance with, the practice generally prevailing at the time when the repayment was made. (Added 2 of 1971 s. 39) 61. Certain transactions and dispositions to be disregarded Where an assessor is of opinion that any transaction which reduces or would reduce the amount of tax payable by any person is artificial or fictitious or that any disposition is not in fact given effect to, he may disregard any such transaction or disposition and the person concerned shall be assessable accordingly.

61A. Transactions designed to avoid liability for tax (1) This section shall apply where any transaction has been entered into or effected after the commencement of the Inland Revenue (Amendment) Ordinance 1986 (7 of 1986) (other than a transaction in pursuance of a legally enforceable obligation incurred prior to such commencement) and that transaction has, or would have had but for this section, the effect of conferring a tax benefit on a person (in this section referred to as "the relevant person"), and, having regard to- (a) the manner in which the transaction was entered into or carried out; (b) the form and substance of the transaction; (c) the result in relation to the operation of this Ordinance that, but for this section, would have been achieved by the transaction; (d) any change in the financial position of the relevant person that has resulted, will result, or may reasonably be expected to result, from the transaction; (e) any change in the financial position of any person who has, or has had, any connection (whether of a business, family or other nature) with the relevant person, being a change that has resulted or may reasonably be expected to result from the transaction; (f) whether the transaction has created rights or obligations which would not normally be created between persons dealing with each other at arm's length under a transaction of the kind in question; and (g) the participation in the transaction of a corporation resident or carrying on business outside Hong Kong, it would be concluded that the person, or one of the persons, who entered into or carried out the transaction, did so for the sole or dominant purpose of enabling the relevant person, either alone or in conjunction with other persons, to obtain a tax benefit.

(2) Where subsection (1) applies, the powers conferred upon an assessor under Part X shall be exercised by an assistant commissioner, and such assistant commissioner shall, without derogation from the powers which he may exercise under that Part, assess the liability to tax of the relevant person- (a) as if the transaction or any part thereof had not been entered into or carried out; or (b) in such other manner as the assistant commissioner considers appropriate to counteract the tax benefit which would otherwise be obtained.

(3) In this section- "tax benefit" means the avoidance or postponement of the liability to pay tax or the reduction in the amount thereof; "transaction" includes a transaction, operation or scheme whether or not such transaction, operation or scheme is enforceable, or intended to be enforceable, by legal proceedings.

(Added 7 of 1986 s. 10) 61B. Utilization of losses to avoid tax Where the Commissioner is satisfied that- (a) any change in the shareholding in any corporation, as a direct or indirect result of which profits have been received by or accrued to that corporation during any year of assessment, has been effected by any person after the commencement of the Inland Revenue (Amendment) Ordinance 1986 (7 of 1986); and (b) the sole or dominant purpose of the change was for the purpose of utilizing any loss or any balance of any loss sustained in a trade, profession or business carried on by the corporation, in order to avoid liability on the part of that corporation or any other person for the payment of any tax or to reduce the amount thereof, the set off of any such loss or balance of loss against any such profits shall be disallowed.

(Added 7 of 1986 s. 10) 62. Notice to be issued by Commissioner (1) The Commissioner shall give a notice of assessment to each person who has been assessed stating the amount assessed, the amount of tax charged, and such due date for payment thereof as may be fixed by the Commissioner.

(Amended 2 of 1971 s. 40) (2) Where the assessment is a provisional assessment made under section 59 (2) the person assessed shall be notified accordingly by the Commissioner, and he shall further be notified in due course by the Commissioner if such provisional assessment is confirmed. The confirmation of a provisional assessment shall not preclude the making of an additional assessment subsequently under section 60.

(3) Where by reason of an amendment of the law it is necessary to vary the amount of tax charged in any notice of assessment the Commissioner may give such notification as may be necessary to the person assessed in that notice of assessment, and any notification so given shall, as regards any particulars of the assessment contained in the notification which have not been included in the notice of assessment, have effect as if the notification were a notice of assessment.

(Amended 35 of 1965 s. 27) 63. Validity of assessments, etc.

No notice, assessment, certificate, or other proceeding purporting to be in accordance with the provisions of this Ordinance shall be quashed, or deemed to be void or voidable, for want of form, or be affected by reason of a mistake, defect, or omission therein, if the same is in substance and effect in conformity with or according to the intent and meaning of this Ordinance, and if the person assessed or intended to be assessed or affected thereby is designated therein according to common intent and understanding.

63A. Appointment of agent in the United Kingdom For the purposes of facilitating the assessment of the income or profits of a person residing in the United Kingdom the Governor may appoint an agent in the United Kingdom who may exercise in respect of any United Kingdom resident who may apply to be dealt with through him all the powers conferred by this Ordinance on an assistant commissioner. The agent appointed under this section shall report to the Commissioner the amount of the assessable income or profits of any such person ascertained in accordance with the provisions of this Ordinance and shall forward to the Commissioner the accounts and computations upon which his assessment is based: Provided that nothing in this section shall affect the right of objection or appeal under Part XI. (Amended 35 of 1965 s. 28) (Added 49 of 1956 s. 45) PART XA PROVISIONAL SALARIES TAX 63B. Liability for provisional salaries tax (1) Every person who is chargeable to salaries tax under Part III in respect of any year of assessment shall be liable to pay provisional salaries tax in respect of that year of assessment in accordance with this Part.

(2) In the case of a husband and wife, where either the husband or wife is assessed to salaries tax under section 10 (3) on the aggregate of their net chargeable incomes in respect of the year of assessment preceding that in respect of which provisional salaries tax is payable- (a) such provisional salaries tax shall be payable on the net chargeable income adjusted as necessary under section 63C (1); and (b) the person who is assessed to salaries tax in respect of that preceding year of assessment shall be solely liable to pay that provisional salaries tax. (Replaced 43 of 1989 s. 20) (Replaced 71 of 1983 s. 30) 63C. Amount of provisional salaries tax [1] (1) Subject to subsections (2) and (3), provisional salaries tax in respect of any year of assessment shall be payable at the rates specified in Schedule 2 for that year of assessment by reference to the amount of the net chargeable income for the preceding year of assessment adjusted, for the purposes of this section, as follows- (a) any loss set off under section 12A in calculating the net assessable income, or net assessable incomes, on which that net chargeable income is based, shall be added; (Amended 71 of 1983 s. 31 (a) (i)) (b) any loss which may be set off under section 12A in the year of assessment shall be set off against that amount: Provided that- (i) in respect of the year of assessment up to and including the year of assessment commencing on 1 April 1984, in no case shall the amount of provisional salaries tax charged on any person under this subsection exceed the amount which would have been chargeable on him had the standard rate for the year of assessment been charged on the whole of his assessable income for the preceding year of assessment as reduced by the outgoings, expenses and allowances provided for in section 12 (1) and any excess set off under section 12A; and (ii) in respect of the year of assessment commencing on 1 April 1985 and subsequent years of assessment, in no case shall the amount of provisional salaries tax charged under this subsection exceed the amount which would have been chargeable had the standard rate been charged on the whole of- (A) the net assessable income for the preceding year of assessment as reduced by approved charitable donations provided for under section 12BA; or (B) in the case of a husband and wife to whom section 63B (2) applies, the aggregate of their net assessable incomes for the preceding year of assessment as reduced by approved charitable donations provided for under section 12BA. (Replaced 43 of 1989 s. 21) (1A) (Repealed 43 of 1989 s. 21) (2) If a person commences to derive income from a source on a day within any year of assessment, an assessor may estimate the sum in respect of which provisional salaries tax is payable in that year and the succeeding year of assessment. (Amended 71 of 1983 s. 31) (3) If a person ceases to derive income from a source within any year of assessment an assessor may estimate the sum in respect of which provisional salaries tax is payable for that year of assessment and for the year preceding that year of assessment. (Amended 71 of 1983 s. 31) (4) If a person is liable to pay provisional salaries tax, an assessor shall, as soon as may be after the expiration of the time limited by the notice requiring that person to furnish a return under section 51 (1), assess or estimate the amount of the provisional salaries tax which he is liable to pay.

(5) Notwithstanding subsection (4), an assessor may assess or estimate the amount of provisional salaries tax which any person is liable to pay if he is of the opinion that the person is about to leave Hong Kong or that for any other reason it is expedient to do so. (Amended 7 of 1986 s. 12) (6) When an assessor has assessed or estimated the amount of provisional salaries tax which a person is liable to pay, the Commissioner shall give a notice to that person stating the amount of provisional salaries tax to be paid, and such due date for payment thereof as may be fixed by the Commissioner.

(6A) Where in any year of assessment a notice for payment of provisional salaries tax has been given under subsection (6) and thereafter any rate specified in Schedule 2, or any allowance provided for in Part V, for that year of assessment is amended, the amount of provisional salaries tax stated in the notice shall nevertheless be payable. (Added 32 of 1981 s.

9. Amended 43 of 1989 s. 21) (7) For the purposes of Part XII, provisional salaries tax shall be deemed to be a tax charged under the provisions of this Ordinance and a notice under subsection (6) shall be deemed to be a notice of assessment. (Added 8 of 1973 s. 13. Amended 7 of 1975 s. 36) 63D. Demands for provisional salaries tax (1) In any year of assessment, a notice for payment of provisional salaries tax may be- (a) given separately to any person liable to pay provisional salaries tax; or (b) included in a notice of assessment to salaries tax. (Amended 7 of 1975 s. 37) (2) (Repealed 7 of 1975 s. 37) (Added 8 of 1973 s. 13) 63E. Holding over of payment of provisional salaries tax (1) Where, in relation to any year of assessment, a person is liable to pay provisional salaries tax, he may, by notice in writing lodged with the Commissioner not later than 14 days before the day by which the provisional salaries tax is to be paid, apply to the Commissioner on any of the grounds specified in subsection (2) to have the payment of the whole or part of such tax held over until he is required to pay salaries tax for that year of assessment or, in the case of an application on the ground set out in subsection (2) (d), until- (a) the determination of the objection or settlement thereof under section 64 (3); (b) he is required to pay salaries tax for that year of assessment, whichever is the sooner. (Amended 7 of 1975 s. 38; 71 of 1983 s. 32; 43 of 1989 s. 22) (2) The grounds referred to in subsection (1) are- (a) that the person assessed to provisional salaries tax has become entitled during the year of assessment to an allowance under Part V, which allowance was not taken into account in the ascertainment of his net chargeable income for the year preceding the year of assessment or in estimating the sum in respect of which such person is liable to pay provisional salaries tax; (Amended 33 of 1973 s. 4; 79 of 1978 s. 3; 43 of 1989 s. 22) (b) that the net chargeable income during the year of assessment of the person assessed to provisional salaries tax is, or is likely to be, less than 90% of the net chargeable income for the year preceding the year of assessment or of the estimated sum in respect of which such person is liable to pay provisional salaries tax; (Amended 7 of 1975 s. 38) (c) that the person assessed to provisional salaries tax has ceased, or will before the end of the year of assessment cease, to derive income chargeable to salaries tax; or (d) that the person assessed to provisional salaries tax has objected under section 64 to his assessment to salaries tax for the year preceding the year of assessment. (Added 7 of 1975 s. 38) (3) On receipt of an application under subsection (1), the Commissioner shall consider the same and may hold over the payment of the whole or part of the provisional salaries tax.

(4) The Commissioner shall, by notice in writing, inform the person applying under subsection (1) of his decision.

(5) (Repealed 43 of 1989 s. 22) (Added 8 of 1973 s. 13) 63F. Provisional salaries tax to be applied against salaries tax (1) When any person had paid provisional salaries tax in respect of any year of assessment, the Commissioner shall, not later than when he gives notice of assessment of salaries tax, apply the amount of provisional salaries tax so paid in payment first of- (a) the salaries tax payable by that person for that year of assessment; then (b) the provisional salaries tax payable in respect of the year of assessment succeeding that year of assessment, and shall refund to the person paying the provisional salaries tax the amount of the provisional salaries tax not so applied. (Replaced 7 of 1975 s. 39) (2) (Repealed 43 of 1989 s. 23) (Added 8 of 1973 s. 13) PART XB PROVISIONAL PROFITS TAX 63G. Liability for provisional profits tax Every person who is chargeable to profits tax under Part IV in respect of the year of assessment commencing on 1 April 1975 or any succeeding year of assessment shall be liable to pay provisional profits tax in respect of that year of assessment in accordance with this Part.

(Added 7 of 1975 s. 40) 63H. Amount of provisional profits tax (1) Subject to subsections (2), (3) and (4), provisional profits tax in respect of any year of assessment shall be payable at the standard rate by reference to the amount of assessable profits for the year preceding the year of assessment, but after the set off of any loss available for set off in the year of assessment under section 19 or 19C: Provided that, in the case of a corporation, provisional profits tax shall be payable- (a) for the year of assessment commencing on 1 April 1975, at the rate of 16 1/2%; (b) for the year of assessment commencing on 1 April 1976 and all subsequent years of assessment up to and including the year of assessment commencing on 1 April 1979, at the rate of 17%; (c) for the year of assessment commencing on 1 April 1980 and all subsequent years of assessment up to and including the year of assessment commencing on 1 April 1983, at the rate of 16 1/2%; (Replaced 32 of 1981 s. 10. Amended 36 of 1984 s. 6; 28 of 1987 s. 7) (d) for the year of assessment commencing on 1 April 1984 and all subsequent years of assessment up to and including the year of assessment commencing on 1 April 1986, at the rate of 18 1/2%; (Added 36 of 1984 s.

6. Amended 28 of 1987 s. 7; 28 of 1988 s. 6) (e) for the year of assessment commencing on 1 April 1987, at the rate of 18%; (Added 28 of 1987 s. 7. Amended 28 of 1988 s. 6; 17 of 1989 s. 16) (f) for the year of assessment commencing on 1 April 1988, at the rate of 17%; (Added 28 of 1988 s. 6. Amended 17 of 1989 s. 16; 34 of 1992 s. 3) (g) for the year of assessment commencing on 1 April 1989 and all subsequent years of assessment up to and including the year of assessment commencing on 1 April 1991, at the rate of 16 1/2%; and (Added 17 of 1989 s. 16. Amended 34 of 1992 s. 3) (h) for the year of assessment commencing on 1 April 1992 and all subsequent years of assessment, at the rate of 17 1/2%. (Added 34 of 1992 s. 3) (2) In calculating any assessable profits for a year preceding a year of assessment for the purposes of computing provisional profits tax under subsection (1), there shall be disregarded any loss available for set off in that year.

(3) Where the amount of assessable profits of a person for the year preceding the year of assessment was calculated on a basis period of more or less than 1 year, an assessor may estimate the sum in respect of which such person is liable to pay provisional profits tax in that year of assessment.

(4) If a person commences to carry on a trade, profession or business in Hong Kong on a day within a year of assessment commencing on or after 1 April 1974, an assessor may estimate the sum in respect of which such person is liable to pay provisional profits tax in that year and the succeeding year of assessment. (Amended 7 of 1986 s. 12) (5) If a person is liable to pay provisional profits tax, an assessor shall, as soon as may be after the expiration of the time limited by the notice requiring that person to furnish a return under section 51 (1), assess or estimate the amount of provisional profits tax which he is liable to pay.

(6) Notwithstanding subsection (5), an assessor may assess or estimate the amount of provisional profits tax which any person is liable to pay if he is of the opinion that the person is about to leave Hong Kong or that for any other reason it is expedient to do so. (Amended 7 of 1986 s. 12) (7) When an assessor has assessed or estimated the amount of provisional profits tax which a person is liable to pay, the Commissioner shall give a notice to that person stating the amount of provisional profits tax to be paid, and such due date for payment thereof as may be fixed by the Commissioner.

(7A) Where in any year of assessment a notice for payment of provisional profits tax has been given under subsection (7) and thereafter the rate of provisional tax for that year of assessment is amended, the amount of provisional profits tax stated in the notice shall nevertheless be payable. (Added 32 of 1981 s. 10) (8) For the purposes of Part XII, provisional profits tax shall be deemed to be a tax charged under this Ordinance and a notice under subsection (7) shall be deemed to be a notice of assessment.

(Added 7 of 1975 s. 40) 63I. Demands for provisional profits tax In any year of assessment, a notice for payment of provisional profits tax may be- (a) given separately to the person liable to pay that provisional profits tax; or (b) included in a notice of assessment to profits tax. (Added 7 of 1975 s.

40) 63J. Holding over of payment of provisional profits tax (1) Where in relation to any year of assessment a person is liable to pay provisional profits tax, he may, by notice in writing lodged with the Commissioner not later than 14 days before the day by which the provisional profits tax is to be paid, apply to the Commissioner on any of the grounds specified in subsection (2) to have the payment of the whole or part of such tax held over until he is required to pay profits tax for that year of assessment or, in the case of an application on the ground set out in subsection (2) (e), until- (a) the determination of the objection or settlement thereof under section 64 (3); or (b) he is required to pay profits tax for that year of assessment, whichever is the sooner.

(2) The grounds referred to in subsection (1) are- (a) that the assessable profits for the year of assessment of the person assessed to provisional profits tax are, or are likely to be, less than 90% of the assessable profits for the year preceding the year of assessment or of the estimated sum in respect of which the person is liable to pay provisional profits tax; (b) that the amount of any loss brought forward for set off to that year of assessment under section 19 of 19C has been omitted or is incorrect; (c) that the person assessed to provisional profits tax has ceased, or will before the end of the year of assessment cease, to carry on his trade, profession or business and that the assessable profits to be assessed under section 18D for that year of assessment are, or are likely to be, less than the assessable profits for the year preceding the year of assessment or of the estimated sum in respect of which the person is liable to pay provisional profits tax; (d) that the person assessed to provisional profits tax has elected or is deemed to have elected to be personally assessed under Part VII for that year of assessment and that such personal assessment is likely to reduce his liability to tax; or (e) that the person assessed to provisional profits tax has objected under section 64 to his assessment to profits tax for the year preceding the year of assessment.

(3) On receipt of an application under subsection (1), the Commissioner shall consider the same and may hold over the payment of the whole or part of the provisional profits tax.

(4) The Commissioner shall, by notice in writing, inform the person applying under subsection (1) of his decision.

(Added 7 of 1975 s. 40) 63K. provisional profits tax to be applied against profits tax When any person has paid provisional profits tax in respect of any year of assessment, the Commissioner shall, not later than when he gives notice of assessment of profits tax, apply the amount of provisional profits tax so paid in payment first of- (a) the profits tax payable by that person for that year of assessment; then (b) the provisional profits tax payable in respect of the year of assessment succeeding that year of assessment, and shall refund to the person paying the provisional profits tax the amount thereof not so applied.

(Added 7 of 1975 s. 40) PART XC PROVISIONAL PROPERTY TAX 63L. Liability for provisional property tax Every person who is chargeable to property tax under Part II in respect of any year of assessment commencing on or after 1 April 1983 shall be liable to pay provisional property tax in respect of that year of assessment in accordance with this Part. (Added 8 of 1983 s. 18) 63M. Amount of provisional property tax (1) Provisional property tax in respect of any year of assessment shall be payable at the standard rate on the net assessable value of land or buildings or land and buildings for the year preceding the year of assessment.

(2) Where the amount of assessable value of land or buildings or land and buildings for the year preceding the year of assessment was calculated in respect of a period of less than one year, an assessor may estimate the assessable value in respect of which provisional property tax is payable.

(3) Where a person becomes chargeable to property tax during a year of assessment, an assessor may estimate the assessable value in respect of which provisional property tax is payable in that year and the succeeding year of assessment.

(4) Where a person is liable to pay provisional property tax, an assessor shall, as soon as may be after expiration of the time limited by the notice requiring that person to furnish a return under section 51 (1), assess or estimate the amount of provisional property tax which he is liable to pay.

(5) Notwithstanding subsection (4), an assessor may assess or estimate the amount of provisional property tax which any person is liable to pay if he is of the opinion that the person is about to leave Hong Kong or that for any other reason it is expedient to do so.

(6) When an assessor has assessed or estimated the amount of provisional property tax which a person is liable to pay, the Commissioner shall give a notice to that person stating the amount of provisional property tax to be paid, and such due date for payment thereof as may be fixed by the Commissioner.

(7) Where in any year of assessment a notice for payment of provisional property tax has been given under subsection (6) and thereafter the allowance mentioned in section 5 (1A) or the rate of provisional property tax for that year of assessment is amended, the amount of provisional property tax stated in the notice shall nevertheless be payable. (8) For the purposes of Part XII, provisional property tax shall be deemed to be a tax charged under this Ordinance and a notice under subsection (7) shall be deemed to be a notice of assessment.

(Added 8 of 1983 s. 18) 63N. Demands for provisional property tax In any year of assessment, a notice for payment of provisional property tax may be- (a) given separately to the person liable to pay that provisional property tax; or (b) included in a notice of assessment to property tax.

(Added 8 of 1983 s. 18) 63O. Holding over of payment of provisional property tax (1) Where in relation to any year of assessment a person is liable to pay provisional property tax, he may, by notice in writing lodged with the Commissioner not later than 28 days before the day by which the provisional property tax is to be paid, apply to the Commissioner on any of the grounds specified in subsection (2) to have the payment of the whole or part of such tax held over until he is required to pay property tax for that year of assessment or, in the case of an application on the ground set out in subsection (2) (d), until- (a) the determination of the objection or settlement thereof under section 64 (3); or (b) he is required to pay property tax for that year of assessment, whichever is the sooner.

(2) The grounds referred to in subsection (1) are- (a) that the assessable value for the year of assessment is, or is likely to be, less than 90% of the assessable value for the year preceding the year of assessment or of the estimated assessable value in respect of which the person is liable to pay provisional property tax; (b) That the person assessed to provisional property tax has ceased, or will before the end of the year of assessment cease, to be an owner of land or buildings or land and buildings and that the assessable value for the year of assessment is, or is likely to be, less than the assessable value for the year preceding the year of assessment is, or is likely to be, less than the assessable value for the year preceding the year of assessment or the estimated sum in respect of which the person is liable to pay provisional property tax; (c) that the person assessed to provisional property tax has elected or is deemed to have elected to be personally assessed under Part VII for that year of assessment and that such personal assessment is likely to reduce his liability to tax; or (d) that the person assessed to provisional property tax has objected under section 64 to his assessment to property tax for the year preceding the year of assessment.

(3) On receipt of an application under subsection (1), the Commissioner shall consider the same and may hold over the payment of the whole or part of the provisional property tax.

(4) The Commissioner shall, by notice in writing, inform the person applying under subsection (1) of his decision.

(Added 8 of 1983 s. 18) 63P. Provisional property tax to be applied against property tax When any person has paid provisional property tax in respect of any year of assessment, the Commissioner shall, not later than when he gives notice of assessment of property tax, apply the amount of provisional property tax so paid in payment first of- (a) the property tax payable by that person for that year of assessment; then (b) the provisional property tax payable in respect of the year of assessment succeeding that year of assessment, and shall refund to the person paying the provisional property tax the amount thereof not so applied.

(Added 8 of 1983 s. 18) PART XI OBJECTIONS AND APPEALS (Amended 26 of 1969 s. 33) 64. Objections (1) Any person aggrieved by an assessment made under this Ordinance may, by notice in writing to the Commissioner, object to the assessment; but no such notice shall be valid unless it states precisely the grounds of objection to the assessment and, in the case of an assessment other than a provisional assessment, is received by the Commissioner within 1 month after the date of the notice of assessment or, in the case of a provisional assessment, within 1 month after the date of the notice under section 62 (2) confirming such assessment: (Amended 2 of 1971 s. 41) Provided that- (a) if the Commissioner is satisfied that owing to absence from Hong Kong, sickness or other reasonable cause, the person objecting to the assessment was prevented from giving such notice within such period, the Commissioner shall extend the period as may be reasonable in the circumstances; (Amended 7 of 1986 s. 12) (b) where any assessment objected to has been made under section 59 (3) in the absence of any return required under section 51, no notice of objection against such assessment shall be valid unless, in addition to such notice being valid in accordance with the foregoing provisions of this subsection, the return required as aforesaid has been made within the period provided by this subsection for objecting to the assessment or within such further period as the Commissioner may approve for the making of such return; (c) where the assessment is a reassessment of the tax due from a person having the effect of either increasing or reducing that person's liability to tax, the person so reassessed shall have no further right of objection than he would have had if the reassessment had not been made except to the extent to which, by reason of the reassessment, a fresh liability in respect of any particular is imposed on him or an existing liability in respect of any particular is increased or reduced. (Replaced 2 of 1971 s.

41) (2) On receipt of a valid notice of objection under subsection (1) the Commissioner shall consider the same and within a reasonable time may confirm, reduce, increase or annul the assessment objected to, and for the purpose of discharging his functions under this subsection may, by notice in writing, require the person giving the notice of objection to furnish such particulars as the Commissioner may deem necessary with respect to the matters which are the subject of the assessment and to produce all books or other documents in his custody or under his control relating to such matters, and may summon any person who in his opinion is able to give evidence respecting the assessment to attend before him and may examine such person on oath or otherwise. Where the Commissioner proposes to examine any person on oath under this subsection, he shall, by prior notice in writing, afford a reasonable opportunity to the person giving the notice of objection or his authorized representative to be present at such examination.
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