HKIRD incorporates court decisions on principles relating to apportionment of expenses into its practices

The Hong Kong Inland Revenue Department (HKIRD) issued, in July 2008, a revised edition of the Departmental Interpretation and Practice Notes (DIPN) No. 3 (Revised) on Profits Tax – Apportionment of Expenses. The first edition of the DIPN was issued in July 1974 and revised in December 1989. In the 1989 revision of DIPN 3, the HKIRD had adopted the principles based on Rules 2A, 2B and 2C of the Inland Revenue Rules (IRR), i.e. the method for apportionment of expenses in general, and of in…