Amendments to Hong Kong’s Foreign-sourced Income Exemption Regime under Consultation

In June 2022, the Hong Kong SAR (HKSAR) government released a consultation paper proposing amendments to the foreign-sourced income exemption (FSIE) regime for passive income to address European Union’s (EU) concerns of non-taxation of passive income, where the income recipient has no substantial economic activity, highlighted on October 2021. HKSAR commits to amend its tax laws by 31 December 2022 and to be applicable as of 1 January 2023.

Victoria Peak Hk Slight Foggy

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根据新拟议的新 FSIE 制度,离岸被动收入,包括利息、知识产权收入、股息和出售股份或股权的收益,在以下情况下将被视为来自香港特别行政区并被视为应纳税:

• the income received in the HKSAR by a constituent entity of a multi-national enterprise (MNEs)
• the receiving entity fails to meet the economic substance requirement for non-IP passive income or fails to comply with the nexus approach for IP passive income