But, are they interchangeable?
I can easily fathom where this confusion arose.
Section 14(1) of the Inland Revenue Ordinance provides that:
"Subject to the provisions of this Ordinance, profits tax shall be charged for each year of assessment at the standard rate on every person carrying on a trade, profession or business in Hong Kong in respect of his assessable profits arising in or derived from Hong Kong for that year from such trade, profession or business (excluding profits arising from the sale of capital assets) as ascertained in accordance with this Part. (Replaced 2 of 1971 s. 9. Amended 7 of 1986 s. 12; 56 of 1993 s. 8)" (emphasis mine)
The drafting makes it unclear whether the indefinite article "a", besides undoubtedly pointing to the immediately following "trade", also points to the subsequent "profession" and "business". But don't blame the draftsmen. Their job is to articulate policy intentions in black and white, not to teach you grammar.
Accepted grammatical rules dictate that "a" shall precede a countable noun, not an uncountable one. This begs the question of in which category "business" falls.
The answer is, it depends on the meaning of the word "business" you intend it to have in a particular context. When you use the word "business" to mean a "a specific commercial enterprise or establishment", the word is countable, as in "Sony’s TV and game businesses". On the other hand, the word "business" is uncountable when you want it to mean "commercial, industrial, or professional activity", as in "we do business all over the world".2
The grammatical rules are clear, which, in turn, leads to the legal question whether the draftsmen intended to impose profits tax on persons carrying on "an establishment", or some "activity" in Hong Kong.
Or, are the two the same thing?
Without citing authorities, I consider it settled law that the mere establishment of an office in Hong Kong will not attract Hong Kong tax liabilities. It follows that it is the "activity", instead of the "establishment" that will.
Fortunately, the IRD is likely to be grammatically, rather than legally, confused.
How about you?
Footnotes:
1. Para 10, Departmental Interpretation and Practice Notes No. 13, (http://www.ird.gov.hk/eng/pdf/e_dipn13.pdf)
2. http://en.wiktionary.org/wiki/business
3. It later came to my attention that prominent judges used “carrying on of a business”:
Accepted grammatical rules dictate that "a" shall precede a countable noun, not an uncountable one. This begs the question of in which category "business" falls.
The answer is, it depends on the meaning of the word "business" you intend it to have in a particular context. When you use the word "business" to mean a "a specific commercial enterprise or establishment", the word is countable, as in "Sony’s TV and game businesses". On the other hand, the word "business" is uncountable when you want it to mean "commercial, industrial, or professional activity", as in "we do business all over the world".2
The grammatical rules are clear, which, in turn, leads to the legal question whether the draftsmen intended to impose profits tax on persons carrying on "an establishment", or some "activity" in Hong Kong.
Or, are the two the same thing?
Without citing authorities, I consider it settled law that the mere establishment of an office in Hong Kong will not attract Hong Kong tax liabilities. It follows that it is the "activity", instead of the "establishment" that will.
Fortunately, the IRD is likely to be grammatically, rather than legally, confused.
How about you?
Footnotes:
1. Para 10, Departmental Interpretation and Practice Notes No. 13, (http://www.ird.gov.hk/eng/pdf/e_dipn13.pdf)
2. http://en.wiktionary.org/wiki/business
3. It later came to my attention that prominent judges used “carrying on of a business”:
“ … In the case of a company incorporated for the purpose of making
profits for its shareholders any gainful use to which it puts any of its assets
prima facie amounts to the carrying on of a business.” (Lord Diplock,
page 565, American Leaf Blending Co. Sd
Bhd v. Director General of Inland Revenue [1978] STC 561 )
Assuming Lord Diplock is not grammatically or (God forbid) legally confused, a likely conclusion may be that the line between an “establishment of
business” and “business activity” is blurred, in somuch as "carrying on business" and "carrying on a business" can be used interchangeably after all.
Jesus Christ, I even confused myself.
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