Taxation
Individuals, corporations, partnerships, trustees and bodies of persons carrying on any trade, profession or business in Hong Kong are chargeable to tax on all profits (excluding profits arising from the sale of capital assets) arising in or derived from Hong Kong from such trade, profession or business.
The three separate direct taxes levied under the Inland Revenue Ordinance (Chapter 112) are :
Profits Tax
Salaries Tax
Property Tax
Foreign-Sourced Income Exemption (“FSIE”)
Hong Kong used to exempt most foreign-derived income from taxes. This changed in 2023 with the Foreign-Source Income Exemption (FSIE) regime. Now, certain types of passive income earned by businesses in Hong Kong, like dividends and interest, are considered taxable unless they meet specific requirements. This can include demonstrating sufficient economic substance in Hong Kong or qualifying for other exemptions. The regime recently expanded in 2024 to cover gains from selling foreign assets, not just equity interests.
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‘FSIE PPT introduction presented by Paul W. C. Ho & Company’
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