Tag: Incorrect tax return

Hong Kong vs Directors of Nam Tai Trading Company Limited, August 2022, Court of Appeal, Case FACV No. 1 of 2022

Hong Kong vs Directors of Nam Tai Trading Company Limited, August 2022, Court of Appeal, Case FACV No. 1 of 2022

The tax returns of Nam Tai Trading Company Limited (“NT Trading”) for the years 1996/97, 1997/98 and 1999/2000 were found by the tax authorities to be incorrect due to non arm’s length pricing of controlled transactions. Mr Koo and Mr Murakami, were directors of NT Trading at the time. Mr Koo signed the first and third of those returns, and Mr Murakami signed the second. NT Trading’s attempts to challenge the Inland Revenue Department’s assessments were unsuccessful. In 2013, the directors were assessed to additional tax under section 82A(1)(a) of the Inland Revenue Ordinance (Cap. 112) (the “Ordinance”) on the basis that the Returns were incorrect. At the relevant time, section 82A(1)(a) provided: “(1) Any person who without reasonable excuse— (a) makes an incorrect return by omitting or understating anything in respect of which he is required by this Ordinance to make a return, either on his behalf or on behalf of another person or a partnership… shall… be liable ... Read more