The Hong Kong Government has published a response to questions posed in the Legislative Council on whether it will consider relaxing restrictions to enable manufacturers to claim tax allowances in respect of the machinery, equipment and intellectual property rights used in their production procedures located outside Hong Kong. The response is as follows: --- Section 39E of the Inland Revenue Ordinance (IRO) is an anti-avoidance provision, which aims at limiting tax avoidance opportunities arising from machinery or plant leasing arrangements. According to that provision, depreciation allowance will not be granted if the machinery or plant owned by a taxpayer is...