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Government today publishes legislative bill on the proposed refined FSIE regime
In June 2022, the Financial Services and the Treasury Bureau (FSTB) issued a consultation paper proposing refinements to the Hong Kong’s FSIE regime (the consultation paper). The consultation paper outlines the refinements that need to be made to address the European Union’s (EU) concerns about the risks of double non-taxation for certain passive income derived by entities that have no economic substance in Hong Kong.
We have since solicited from stakeholders their views on the issues and then made a detailed submission to the FSTB on the consultation paper.
Today, the HKSAR government (the government) published in a gazette the Inland Revenue (Amendment) (Taxation on Specified Foreign-sourced Income) Bill 2022 (the Bill). Subject to the passage of the Bill by the Legislative Council, the proposed refined FSIE regime will take effect from 1 January 2023 (which is the deadline imposed on Hong Kong by the EU otherwise Hong Kong risking being blacklisted).
As compared with that proposed in the consultation paper, the refined FSIE regime now proposed in the Bill contains several major enhancements. Please refer to the Hong Kong Tax alert for details.
Download this Hong Kong Tax Alert（繁體中文）
Download this Hong Kong Tax Alert（简体中文）