Taxation CommitteeCommittee Activities

Hong Kong's Refined Foreign-sourced Income Exemption Regime- A critical assessment of the proposed legislation and administrative guidance

Following a seminar on the government’s proposed Foreign-sourced Income Exemption (FSIE) Regime in September, the Chamber again hosted Sarah Chan and Kwan Yu, Tax Partners from Deloitte China, on 1 December, when they provided updates on further legislative developments with the relevant Bill, which was gazetted in October 2022 and is expected to come into force on 1 January 2023. They also shared insights on the Bill's impact on businesses and offered advice on possible responses by affected entities including applications for CIR Opinion, an interim measure to provide taxpayers with certainty on their compliance with economic substance requirements under the FSIE regime.

Changes to Hong Kong's Foreign-Source Income Exemption Regime - Assessing the Impact and Adapting to the New Normal

Taxpayers will have to adapt to the refined FSIE regime, a legislative amendment proposed by the Government on the treatment of offshore passive income, which will be chargeable to profits tax if certain conditions are not met. To help members understand and prepare for such a change, Sarah Chan and Kwan Yu, Tax Partners at Deloitte China, shared their insights on how to anticipate and navigate challenges arising from such legislative reforms at a seminar on 21 September.

Buy The Shares Or The Property? Understanding The Tax Implications Of Buying Real Estate Through A Company

A seminar was organised on 8 September to consider the tax implications of buying and selling real estate through a company. Wilson Cheng and Jacqueline Chow, respectively Tax Partner and Director at Ernst and Young, explained the benefits and drawbacks with property transfer arrangements and also shared advice on mitigating tax risks through this approach. 

OECD GloBE Rules: What Should Hong Kong’s Real Estate Industry Expect From the New Global Minimum Tax Regime?

A seminar was organised on 11 August on the likely impact the implementation of GloBE rules would have on Hong Kong-based property companies. Deloitte China's Vice Chair Patrick Yip and Tax Partner Doris Chik were on hand to explain the tax implications of the GloBE rules on Hong Kong's real estate sector and offered their views on measures to manage associated tax risks.

New Tax Controversy Issues Arising From Digital Economy: How Should Businesses Cope

Tax authorities are increasingly turning their sights on e-commerce activities as evidence by the historic adoption of BEPS 2.0 last year. At a webinar on 17 March, PwC representatives Philip Hung, Felix Tsang and Flora Chan spoke extensively on the implications of such a global tax reform on Hong Kong’s digital economy and how businesses should cope.

Tax Changes Ahead: BEPS 2.0 and the E.U. Grey List

Two separate developments in the global tax landscape -- the new two-pillar international corporate tax framework known as BEPS 2.0 and the inclusion of Hong Kong on the E.U.’s watchlist on tax cooperation -- will have an impact on Hong Kong and businesses that currently benefit from the city's low and simple corporate tax.

At a webinar on 18 January, Jesse Kavanagh and Cecilia Lee, respectively Tax & Business Advisory Services Partner and Transfer Pricing Partner from PwC Hong Kong, discussed how these developments could potentially affect the tax compliance and planning process for businesses. They also explained their impact on Hong Kong's operating environment as the SAR government was moving forward to implement BEPS 2.0 by such means as establishing an advisory panel and holding focus groups; and to amend corresponding legislation to address E.U.’s concerns by the end of 2022.