有關利得稅(badges of trade)(英轉中)

1. The definition in English and Chinese as follows:-

(a) 出售貨物的性質the subject matter of the realization means form of property e.g. commodities or manufactured articles;
(b) 貨物擁有期的長短the length of the period of ownership means the shorter the length it gives rise to trading;
(c) 出售同類貨物的次數the frequency or number of similar transactions means more frequent realization over a period of years gives rise to trading.
(d) 有否為貨物加工 supplementary work in connection with the subject matter means any work such as large scale advertising or opening of an office give rise to trading;
(e) 在何種情況下出售貨物the circumstances leading to the realization means planned selling is trading and on the contrary sudden emergency selling is not.
(f) 出售的動機the motive means the purpose of purchase and sale.

2. The six badges of trade are the main principles adopted from the verbatim report of the Royal Commission on the Taxation of Profits and Income in 1955, to determine whether an isolated transaction or series of transactions constitutes a trade giving rise to a profit subject to Profits Tax.

3. There are different gain whether they constitute trade. For disposal gain of real property, you can refer to tax cases in HKG CIR v Sincere Insurance and Investment Co. 1973 in which an insurance company owns real property. For purchase and sale of shares, you can refer to CIR v Dr. Chang Liang-Jen, CIR v Tong Kwan-Che (bonus shares issue)

Badges Of Trade

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