Refined foreign source income exemption (FSIE) regime was passed in Hong Kong and came into effect
Further to the introduction of the Inland Revenue (Amendment) (Taxation on Specified Foreign-sourced Income) Bill 2022 (“Bill”) into the Legislative Council in October 2022, the Hong Kong SAR Government (“HK Government”) subsequently proposed certain Committee Stage Amendments (“CSA”) to the Bill based on the comments given by the European Union (“EU”). The Bill together with the aforesaid amendments were passed by the Legislative Council on 14 December 2022 and the relevant laws came into effect on 1 January 2023. Such amendments would affect whether taxpayers can continue to enjoy offshore tax exemption on their passive incomes under the new FSIE regime. In this regard, we are pleased to summarize the major amendments and share our relevant thoughts for your reference.