We summarise briefly below some recent developments in Hong Kong relating to tax.
A new tax regime for Family Office established in Hong Kong
The Inland Revenue (Amendment) (Tax Concessions for Family-owned Investment Holding Vehicles) Bill 2022 was gazette in early December 2022. This legislation seeks to provide certain tax advantages for family-owned investment holding entities which are managed by single family offices.
This is very similar to the Singapore section 13O Exemption.
Proposed changes to Hong Kong’s foreign source income exemption regime for passive income
The Hong Kong SAR government has proposed to amend Hong Kong’s foreign source income exemption (FSIE) regime for passive income with effect from 1 January 2023. This regime stems from Hong Kong’s commitment to meet international tax standards, and pressures from the OECD and the EU. Four types of offshore passive income, namely (1) interest, (2) income from intellectual properties, (3) dividends and (4) disposal gains in relation to shares or equity interest, will be deemed to be sourced from Hong Kong and chargeable to profits tax under certain circumstances.
Hong Kong companies which receive such income should analyse the effect of this new regime.
For more information on these topics please contact your local office.