Pursuant to section 71 of the Inland Revenue Ordinance (Cap.112), the Commissioner of Inland Revenue may in his discretion order a surcharge of not exceeding 5% on the amount of tax outstanding after the due date and a further surcharge of not exceeding 10% on the amount remaining unpaid after 6 months from the due date.

On 18 June 2021, the Inland Revenue Department (IRD) announced a relief measure on tax payment.  For taxpayers who have obtained the IRD’s approval for instalment settlement of the demand notes for Salaries Tax, Profits Tax and Personal Assessment for the year of assessment 2020/21 issued between May 2021 and May 2022, no surcharge will be imposed for a maximum period of one year counted from the respective due dates of the demand notes, provided that the instalment plans are duly adhered to.

If the tax demand under the first instalment of the demand note has been settled on or before the due date and instalment plan is only granted for settlement of the tax demanded under the second instalment, the one-year period will count from the due date for the second instalment.

For more information, please refer to the Inland Revenue Department’s website.

The Securities and Futures Commission (the “SFC”) recently publicly reprimanded and imposed a fine in the sum of HK$400,000 on a Money Laundering Reporting Officer (“MLRO”) / Compliance Officer of a SFC licenced firm for his failure to discharge his duties as a member of the firm’s senior management, including failures to conduct adequate enquiries before approving unusual or suspicious third party fund transfers, to maintain proper records of enquiries, to ensure proper and adequate systems were in place to mitigate money laundering risks, etc.

In this case, the MLRO is not a licensed person under the Securities and Futures Ordinance (“SFO”), but comes within the definition of a “regulated person” under section 194(7) of the SFO for being a person involved in the management of the business of a licensed corporation.

This case serves as a reminder that the SFC continues to focus on anti-money laundering in its supervision and enforcement work, and will exercise its disciplinary powers against members of senior management of a licenced firm irrespective of whether they are licensed or registered with the SFC.

For more information, please refer to the SFC’s website at LINK.

Our client bulletin for June 2021 covers the following topics:

• Hong Kong Stock Exchange’s Consultation on Review of Listing Rules Relating to Disciplinary Powers and Sanctions.
• Mutual Recognition of and Assistance to Bankruptcy (Insolvency) Proceedings Between the Courts of Mainland and of Hong Kong.
• Arbitration Update.
• Remote Hearings in Hong Kong Arbitration and Court Proceedings.
• Use of a Competitor’s Registered Trade Mark in the Context of Comparative Advertising.
• Corporate Culture, Director Independence and Diversity-the Latest Consultation on Corporate Governance by the Hong Kong Stock Exchange.
• SEHK’s Consultation Conclusions/SFC and SEHK’s Joint Statement

Please click here to view the bulletin.

Pursuant to the new Part 4A and Schedule 7 of the Financial Reporting Council Ordinance (FRCO) gazetted on 17 May 2021, starting from 1 January 2022, the Financial Reporting Council (FRC) will begin to collect levies from (i) sellers and purchasers of securities (i.e. FRC Transaction Levy); (ii) public interest entities (PIEs); and (iii) PIE auditors.

The FRC Transaction Levy for the seller is at a rate of 0.00015% of the consideration for the sale and for the purchaser at a rate of 0.00015% of the consideration for the purchase. The FRC Transaction Levy will be collected on behalf of the FRC by Hong Kong Exchanges and Clearing Limited. No levy is payable for a sale and purchase of a stock option.

​​For more details about the FRC levies, please visit the FRC’s website.

In June 2021, worldwide construction industry consultant Arcadis published its 2021 Global Construction Disputes Report.

The report shows that in 2020, an exceptional year for many, the worldwide average value of construction disputes increased significantly to US$54.26m (from US$30.7m in 2019), while the average length of the dispute period continued to drop to 13.4 months (from 15 months in 2019).

More than 60 percent of survey respondents encountered project impact due to COVID-19.  Not surprisingly, force majeure and third-party impacts entered into the top three causes of disputes in 2020, with owners/contractors failing to understand and/or comply with contractual obligations taking the top spot, moving up from third in 2019.  A party’s failure to understand and/or comply with contractual obligations, the report states, has an easy cure: adequate training and effective advice before and during contract performance.

According to the report, the top three most important factors for early resolution of disputes are: (1) owner/contractor’s willingness to compromise, (2) accurate and timely schedules and reviews by project staff or third parties, and (3) transparency of cost data in support of claimed damages.  These are all important considerations to keep in mind as construction activity across the globe continues to increase while there are labour and material shortages worldwide.

Read the full 2021 Global Construction Disputes Report here:https://www.arcadis.com/en/knowledge-hub/perspectives/global/global-construction-disputes-report.