Hong Kong Tax News Flash

August 2023, Issue 13

Updates on (i) proposed refinements to the FSIE regime and (ii) tax certainty enhancement scheme for onshore equity disposal gains

Earlier this year, the Financial Services and the Treasury Bureau (FSTB) launched two consultation exercises on legislative proposals to (i) refine the foreign-sourced income exemption (FSIE) regime for foreign-sourced disposal gains; and (ii) introduce a tax certainty enhancement scheme for onshore equity disposal gains (Enhancement Scheme).

In late July, the Inland Revenue Department (IRD) organised engagement sessions with stakeholders providing updates on the changes to these legislative proposals in response to comments received during the consultation exercises. We are pleased that the Government has taken up many recommendations made by stakeholders (including PwC).

This news flash summarises the changes to the refined FSIE regime and the Enhancement Scheme, followed by our take on these changes. For the salient features of the original proposals, please refer to our earlier news flashes.