Part 9

Miscellaneous and supplementary provisions

International matters

Application of CFC provisions to Hong Kong and Macao companies
201
1
In Part 2 (exempt activities) of Schedule 25 to the Taxes Act 1988 (cases where section 747(3) does not apply), in paragraph 5 insert after sub-paragraph (2)—
3
In the case of a controlled foreign company—
a
which is, by virtue of section 749(5), presumed to be resident in a territory in which it is subject to a lower level of taxation,
b
the business affairs of which are, throughout the accounting period in question, effectively managed in a special administrative region, and
c
which is liable to tax for that period in that region,
references in the following provisions of this Part of this Schedule to the territory in which that company is resident shall be construed as references to that region.
4
In sub-paragraph (3) above “special administrative region” means the Hong Kong or the Macao Special Administrative Region of the People’s Republic of China.
5
Where sub-paragraph (3) above applies, it applies in place of sub-paragraph (2).
.
2
This section shall be deemed to have had effect—
a
as from 1st July 1997, so far as relating to the Hong Kong Special Administrative Region;
b
as from 20th December 1999, so far as relating to the Macao Special Administrative Region.