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Rules by class of profit
Content date: 2026-08-24
Rules by class of profit
Each class carries its own considerations (see table). Manufacturing profits may be apportioned by contribution under DIPN 28, customarily 50:50. An industry label is not a substitute for the operations test.
Source rules by class of profit (DIPN 21/28)
| Class of profit | Source rule |
|---|---|
| Sale of goods | Where the purchase and sale contracts are effected (negotiation and conclusion) |
| Manufacturing | Apportioned by contribution (customarily 50:50, DIPN 28) |
| Service fees | Where the services are performed |
| Interest | Where the lender’s core operations producing the interest are carried on |
| Rents / royalties | Where the property or right that produces the income is situated or used |
| Listed securities | Where the transaction is effected (place from which the broker is instructed) |
Case-specific decisions differ — book a consultation with our advisers.
The content of this page is general professional information and does not constitute tax, legal or investment advice. For specific cases, please consult a Hong Kong practising accountant or tax adviser, or refer to official publications of the IRD / SFC / HKMA / CR.