Hong Kong Tax News Flash

Feb 2024, Issue 4

Hong Kong removed from European Union’s tax watchlist

Following a meeting of the Council of the European Union (EU) on 20 February 2024, Hong Kong was removed from the EU watchlist regarding international tax co-operation. A press release issued on the same date by the Council of the EU confirms that Hong Kong fulfilled its commitments to strengthening tax good governance standard by amending its foreign-sourced income exemption (FSIE) regime. This brings an end to Hong Kong’s two-year stint on the watchlist.

The removal of Hong Kong from the EU watchlist is a testament to the Hong Kong SAR (HKSAR) government’s commitment to compliance with the international tax standards. It also demonstrates the HKSAR government’s dedication to maintaining Hong Kong’s status as an attractive and reputable place for business and investment.

In addition to Hong Kong, the EU’s external taxation strategy has also prompted legislative changes to the FSIE regime in Malaysia and Singapore. This news flash provides a snapshot of the latest FSIE regimes in these three jurisdictions and our observations thereon.