It is talking about Hong Kong Tax, Special bussiness, calculating profit tax of Financial Instituition, please explain the following slides in a simplier way and with simple exmaple. Loan interest income▸ D7/84OоOоThe taxpayer was a HK FI and the subsidiary of a Tokyo headoffice. The source of the interest income from an offshoresyndicated loans (R) was under dispute.Taxpayer's argument: the funds were made available outside HKand hence offshoreBOR: Agree with the IRD that a distinction had to be drawn between"passive receipt" of interest and "carrying on the business of lendingmoney"。 The Taxpayer was actively lending and borrowing money and madeuse of modern technology and communication systems in itsbusiness75 Loan interest income▸ D7/84• The taxpayer actively solicited business with a large no. ofstaff and decided whether to participate in the loan byassessing the credit and country riskOоProvision of credit is NOT the dominant and only factor inthis case"Provision of credit" test is NOT applicable"Operation test” as laid down in Hong Kong WhampoaDock Company case shall be applied7616

The objective of the question is to understand how to calculate the profit tax for a Financial…

Answered: Loan interest income ▸ D7/84 O о O о…

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