The Hong Kong Inland Revenue Department updated the guidance on the new Foreign-Sourced Income Exemption (FSIE) regime. The updated guidance is a continuation of previously published draft updates initially released when the Bill was introduced.
On 29 November 2023, the Legislative Council of Hong Kong announced the passage of the Inland Revenue (Amendment) (Taxation on Foreign-sourced Disposal Gains) Bill 2023.
One of the significant changes is applying the FSIE regime to capital gains.
Currently, the Foreign-Sourced Income Exemption (FSIE) regime applies to capital gains from selling shares or equity interests of foreign entities. Effective from 1 January 2024, the FSIE regime will also apply to gains obtained from the disposal of assets besides shares or equity interests from foreign sources, alongside specific relief measures.
