Navigating Impacts of Hong Kong's Amended Foreign Source Income Exemption (FSIE) Regime

As part of its commitment to align with the latest international tax standards and in response to global efforts aimed at combating cross-border tax evasion and ensuring tax fairness, Hong Kong introduced the Inland Revenue (Amendment) (Taxation on Specified Foreign-sourced Income) Ordinance 2022 (the Amendment Ordinance). This ordinance, effective from 1 January 2023, brings vital changes to the Foreign Source Income Exemption (FSIE) regime for passive income, aligning it with the Guidance on FSIE regimes promulgated by the European Union. The objective is to establish a clearer link between taxpayers benefitting from preferential tax treatment and substantial economic presence in the jurisdiction.

Under the amended FSIE regime, specific offshore sourced non-taxable income, such as dividends, equity disposal gains, and interest, may now be deemed taxable under certain circumstances if the relevant requirements are not met. This development represents a significant shift from Hong Kong's long-established territorial source principle of taxation and may introduce unforeseen tax exposures that demand the attention of financial practitioners and business executives alike.

Our esteemed speakers, Jennifer Lu, Director and Head of Corporate Accounting Services in our Hong Kong office, and Mil Lui, Manager of Corporate Accounting Services, possess extensive expertise in tax law and compliance matters. They will share their insights and knowledge on the following topics:

Key points:

• Overview of the FSIE regime and the latest updates
• Administration guidance and support provided by Inland Revenue Department
• Potential impacts on multinational corporate groups and how they should handle the potential challenges.

Financial practitioners, tax professionals, corporate executives, legal advisors, business owners and managers, etc. are advised to join this webinar.

This webinar is FREE of charge. For any questions or concerns, please contact Shanshan LIU, at shanshan.liu@dezshira.com. We look forward to having you join us in this webinar, and answering any questions you might have on the subject.

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This Event occurred on Thursday, August 31, 2023. If you were unable to attend it, you can still benefit from these resources that will help you review or discover more: