November 2022 - Bill on the proposed refined foreign source income exemption regime (“FSIE Regime”)

In July 2022, we issued a Hong Kong tax newsletter summarizing the proposal put forward by the Financial Services and the Treasury Bureau to refine the FSIE Regime in Hong Kong. Under the proposed FSIE Regime, in-scope offshore passive income received by covered taxpayers in Hong Kong will be deemed taxable unless exception applies.

After considering the feedback and comments received during the consultation exercise, the government modified their proposal and gazetted the Inland Revenue (Amendment)(Taxation on Specified Foreign-sourced Income) Bill 2022 (“the Bill”) on 28 October 2022. Subject to the passage of the Bill by the Legislative Council, the proposed refined FSIE region will take effect from 1 January 2023.

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