Reinterpretation of Hong Kong tax law after the landmark case Leung Chun Kwong v Secretary for the Civil Service and Commissioner of Inland Revenue



In the June 2019 issue of our Newsletter, we discussed the landmark judgment in Leung Chun Kwong v Secretary for the Civil Service and Commissioner of Inland Revenue ([2019] HKCFA 19; FACV 8/2018), where the Court of Final Appeal (“CFA”) unanimously allowed the final appeal of Leung Chun Kwong and ruled in his favour in respect of his rights as a gay couple to enjoy the same civil servant spousal benefits as those of his heterosexual counterparts and to elect joint salaries tax assessment. The CFA handed down its judgment on 6 June 2019. On 6 September 2019, the CFA delivered its judgment on relief and costs ([2019] HKCFA 34; FACV 8/2018).

This article focuses on the relief on the Tax Decision (as defined below) which involved a reinterpretation of the Inland Revenue Ordinance (Cap. 112) (“IRO”), in particular, the interpretation of the term “marriage”.


Mr Leung is a Hong Kong permanent resident of Chinese nationality.  He has been employed by the Government of the HKSAR as an immigration officer since 2003. In 2014, Mr Leung married his gay partner, Mr Scott Adams (“Mr Adams”), in New Zealand, where same-sex marriage is legal.

The Tax Decision

Under section 10 of the IRO, salaries tax of spouses is to be paid separately unless they elect to be jointly assessed. Mr Leung filed tax return and sought to elect for joint assessment of salaries tax with Mr Adams.

The election was refused by the Commissioner of Inland Revenue (“CIR”) on the ground that Mr Leung and Mr Adams were not husband and wife for the purposes of the IRO (“Tax Decision”).  Consequently, Mr Leung brought a judicial review against the CIR regarding the Tax Decision.

The CFA’s judgment

In respect of the Tax Decision, the CFA held that the Tax Decision constitutes discrimination against Mr Leung based on his sexual orientation contrary to Article 25 of the Basic Law and Articles 1 and 22 of the Hong Kong Bill of Rights and is unlawful.

The CFA ruled that the IRO should be interpreted to be consistent with the Basic Law and the Hong Kong Bill of Rights in the following ways:

(a)     The term “marriage” in section 2 of the IRO shall be read as:

“any marriage, whether or not so recognized, entered into outside Hong Kong according to the law of the place where it was entered into and between persons having the capacity to do so, provided where the persons are of the same sex and such a marriage between them would have been a marriage under this Ordinance but for the fact only that they are persons of the same sex, they shall be deemed for the purposes of such a marriage to have the capacity to do so”; and

(b)     For the purposes of the IRO, references to:

(i)      “husband and wife” shall be read as “a married person and his or her spouse”;

(ii)      “not being a wife living apart from her husband” shall be read as “not being a spouse living apart from the married person”; and

(iii)     “either the husband or wife” shall be read as “either the married person or his or her spouse”.

The CFA ordered a suspension of 6 months for the remedial interpretation to allow time for the CIR to address practical and administrative matters. The remedial interpretation will therefore become effective before the end of the current tax year on 31 March 2020.

Key takeaways

The CFA’s judgment on relief and costs has widened the interpretation of the Hong Kong tax law to allow joint assessment of couples under same-sex marriage. It marked a milestone for development of LGBT rights in Hong Kong. It is expected that the Inland Revenue Department will issue further guidelines and practice notes during the six-month suspension period.

Subject to any further guidelines and practice notes to be issued by the Inland Revenue Department, other tax benefits in relation to spouse of taxpayer, such as the married person’s allowance and the dependent parent and dependent grandparent allowance, that have previously been enjoyed by married heterosexual couples only, may become open to application by couples under same-sex marriage.


For enquiries, please contact our Litigation & Dispute Resolution Department:

E:                                                    T: (852) 2810 1212
W:                                                                    F: (852) 2804 6311

19th Floor, Three Exchange Square, 8 Connaught Place, Central, Hong Kong

Important: The law and procedure on this subject are very specialised and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.
Published by ONC Lawyers © 2019