Overview

The Inland Revenue (Amendment) (Taxation on Specified Foreign-sourced Income) Bill 2022 (the Amendment Bill) was gazetted on 28 October 2022 to refine Hong Kong’s foreign-sourced income exemption (“FSIE”) regime for passive income in response to concern of the European Union ("EU”) over potential double non taxation arising from tax exemption for offshore passive income in Hong Kong. The amendment bill is expected to be passed into law by 31 December 2022, enabling Hong Kong to be removed from EU’s watchlist of non-cooperation jurisdictions for tax purposes. 
 
Under the FSIE regime, certain offshore sourced non-taxable income (e.g. dividend, equity disposal gain, interest) will be deemed taxable in certain situations unless the relevant requirements (e.g. economic substance, participation exemption) are met. It is a significant development of Hong Kong’s long established territorial source principle of taxation and may lead to unexpected tax exposures that relevant financial practitioners and business executives should know. 

Objective

The purpose of this seminar is to provide an overview of the FSIE regime and will also discuss the potential impacts on relevant financial practitioners and business executives & how they should get ready for the enactment from 1 January 2023 onwards. 

Content

1. Overview of the FSIE regime and the latest updates 
2. Potential impacts on investment professionals (e.g. investment managers and proprietary trader) and members of finance functions (e.g. treasury, accounting and tax) in multinational corporate groups 
3. Suggested actions and next steps 

Who should attend

Investment professionals, wealth managers, corporate functions (finance, tax and operation) of fund managers/advisors, securities firms and investment banks.