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Legal Update

No Reprieve for Taxpayers where Fraudulent Profits Tax Paid

24 March 2014
Mayer Brown JSM Legal Update

On 13 March 2014, the Court of Final Appeal (CFA) handed down its ruling in Moulin Global Eyecare Trading Limited (In Liquidation) v. The Commissioner of Inland Revenue and Another FACV 5/2013. The CFA dismissed the taxpayer's appeal and held that the taxpayer should be attributed with the guilty knowledge of the fraudulent directors such that it could not receive a time extension to give notice of objection to an assessment under section 64(1)(a) or correct an "error" in a return under section 70A of the Inland Revenue Ordinance (IRO).

The CFA's decision provides an authoritative ruling on the extent to which a director's or employee's knowledge may be attributable to the taxpayer company. It also defines and limits the scope of the "fraud exception" to the rule of attribution.


  • Susanne J. Harris
    T +852 2843 4522
  • Simon M. S. Au
    T +852 2843 2564

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