Jun 2012, Issue 6
Unrealised gains from stock-in-trade revaluation are not "profits" chargeable to tax
The Court of Appeal ("COA") handed down its judgment in the Nice Cheer case on 19 June 2012. The COA dismissed the Commissioner's appeal and upheld the lower count's judgment that unrealised gains from fair market value revaluation of the taxpayer's trading securities recognised in the financial statements are not "profits" for Hong Kong profits tax purposes. This News Flash provides a summary of the COA's judgment and shares our observations on the implications of the case for taxpayers.
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