Tax law amendment published

0
15
Tax law amendment published

The Inland Revenue (Profits Tax Exemption for Funds) (Amendment) Bill 2018 was gazetted today to provide profits tax exemption for eligible funds operating in Hong Kong.

The Government proposes introducing new and self-contained provisions in the Inland Revenue Ordinance (Cap. 112) (IRO) so that all funds operating in Hong Kong, regardless of their structure, their location of central management and control, their size or the purpose that they serve, can enjoy profits tax exemption for their transactions in specified assets subject to meeting certain conditions.

A fund can also enjoy profits tax exemption from its investment in both overseas and local private companies.

To minimise the risk of tax evasion, the Government will put in place anti-abuse measures, including certain requirements on a fund’s investment in private companies in relation to holding of immovable property and assets, as well as holding period.

The current anti-round tripping provisions for resident persons will be retained.

The bill seeks to address the concerns of the Council of the European Union over the ring-fencing features of Hong Kong’s tax regimes for privately offered offshore funds, adding its proposal has struck a balance between facilitating market development and preventing tax abuse.

The move will enhance the competitiveness of the city’s tax regimes by creating a level playing field for all funds operating in Hong Kong.

The Government added it will also help strengthen Hong Kong’s position as an international asset and wealth management centre and drive demand for the related professional services in the city.

The bill will be introduced into the Legislative Council on December 12.

LEAVE A REPLY

Please enter your comment!
Please enter your name here