As a general rule, the well-informed Hong Kong tax practitioner tends to anticipate developments in Inland Revenue Department (IRD) departmental interpretation and practice notes (DIPNs) with a sense of dread and stoic resignation. In our well-worn cynicism, we assume there will be something wrong with the positions of laws pronounced on behalf of the Commissioner, ex cathedra; the question is only just how wrong the guidance will be and what sort of impact it will have on our clients. The August 2019 revision of DIPN No.28 on the deductibility of foreign taxes under section 16(1) of the Inland Revenue Ordinance (IRO), however, presented the long-suffering tax practitioner with a piece of technical analysis so patently wrong and illinformed that it can only, as I have written in the past in regard to the carry-forward of losses pursuant to an amalgamation, have been impelled by practical concerns, rather than technical purism. At least, one would very much hope that to be the case…

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