EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.
Recent Searches
DIPN 62 – Taxation of ship leasing activities
The Inland Revenue Department (IRD) has recently issued Departmental Interpretation and Practice Notes No. 62 (DIPN 62) explaining the provisions of a new law that grants concessionary tax treatment for (i) qualifying ship lessors and (ii) qualifying ship leasing managers in Hong Kong.
DIPN 62 contains the following noteworthy explanations:
(i) activities including certain financing activities and a leasing manager’s own sub-leasing business of a ship that may not normally be considered as “ship leasing management activities” do so qualify;
(ii) the “adequacy test” for determining the threshold requirements for carrying out core income generating activities (CIGAs) in Hong Kong; and
(iii) certain conventions or concessions adopted for determining whether a person qualifies as a qualifying ship leasing manager under a prescribed safe harbour rule.
Notwithstanding the issuance of DIPN 62, the application of the new law to certain situations could still be complicated. Where necessary, clients should seek professional tax advice.