Further updates on Hong Kong’s Foreign-sourced Income Exemption (FSIE) regime
The Hong Kong SAR Government (“HK Government”) recently issued a consultation paper “Refinement to Hong Kong’s FEIS Regime for Foreign-sourced Disposal Gains” in response to the latest guidance on FSIE regimes promulgated by the European Union (EU).
Hong Kong has remained on the EU's watchlist notwithstanding that it has already implemented the FSIE regime since the beginning of this year, as the EU has issued an updated guidance which explicitly sets out that the scope of foreign-sourced disposal gains under Hong Kong’s FSIE regime is not wide enough. In response to EU’s requirements, the HK Government plans to introduce the relevant amendment bill into the Legislative Council later this year with a view to securing the passage of the bill by the end of 2023. In this regard, we are pleased to summarize the major proposed refinements to the FSIE regime and share our relevant thoughts for your reference.