Gov’t seeks to expand coverage of FSIE regime

The expanded regime will cover more assets.

The Hong Kong Special Administrative Region Government said it will propose an amendment bill to refine Hong Kong's foreign-sourced income exemption regime by expanding the scope of its coverage. 

In a statement, the government said the expanded regime would cover assets other than shares or equity interests.

The measure, titled. Inland Revenue (Amendment) (Taxation on Foreign-sourced Disposal Gains) Bill 2023, will be gazetted on 13 October and introduced into the Legislative Council on 18 October.

The Hong Kong SAR Government said, as a staunch supporter of international tax cooperation, Hong Kong has been coordinating with European Union (EU) and other international organisations in countering cross-border tax avoidance.

The proposed law will align Hong Kong’s FSIE regime with the global standard by requiring corporate taxpayers to have adequate economic substance in Hong Kong to enjoy tax exemption with regard to foreign-sourced disposal gains and prevent shell companies from deriving tax benefits through double non-taxation of foreign-sourced disposal gains.