appellant filed such profits tax returns, but in each declared nil assessable profits for Muse, asserting that the licence fees and technical costs paid to Muse were offshore sourced income of Muse and related to the exhibition of television programming in places other than Hong Kong, and were not taxable under any of sections 15(1)(a), (b) or (ba) of the IRO. (5) The Assessor considered that the licence fees and technical costs received from the appellant by Muse were chargeable to profits tax, and raised profits tax assessments on Muse in the name of the appellant in the amounts of HK$155,155, HK$118,111 and HK$91,219 for the respective years of assessment 2005/06, 2006/07 and 2007/08. The 2005/06 assessment was subsequently increased to HK$161,516 to take account of technical costs which had earlier been omitted. (6) The appellant unsuccessfully objected to the assessments. The Acting Deputy Commissioner confirmed the assessments, on the basis that the licence fees and technical costs were chargeable to profits tax under section 15(1)(ba) of the IRO. The decision below Before the Deputy Judge, the appellant contended that the relevant sums were not chargeable to tax under section 15(1)(ba) of the IRO because : (1) they were not paid for the of or for the to use” “use” “right any copyright material;
appellant filed such profits tax returns, but in each declared nil assessable profits for Muse, asserting that the licence fees and technical costs paid to Muse were offshore sourced income of Muse and related to the exhibition of television programming in places other than Hong Kong, and were not taxable under any of sections 15(1)(a), (b) or (ba) of the IRO. (5) The Assessor considered that the licence fees and technical costs received from the appellant by Muse were chargeable to profits tax, and raised profits tax assessments on Muse in the name of the appellant in the amounts of HK$155,155, HK$118,111 and HK$91,219 for the respective years of assessment 2005/06, 2006/07 and 2007/08. The 2005/06 assessment was subsequently increased to HK$161,516 to take account of technical costs which had earlier been omitted. (6) The appellant unsuccessfully objected to the assessments. The Acting Deputy Commissioner confirmed the assessments, on the basis that the licence fees and technical costs were chargeable to profits tax under section 15(1)(ba) of the IRO. The decision below Before the Deputy Judge, the appellant contended that the relevant sums were not chargeable to tax under section 15(1)(ba) of the IRO because : (1) they were not paid for the “use” of or for the “right to use” any copyright material;
CACV000259_2012.docx