Proposed changes to Hong Kong’s profits tax exemption for funds
On 5 November 2018, the Financial Services and the Treasury Bureau (FSTB) presented its proposal to amend Hong Kong’s current profits tax exemption for funds to the Hong Kong legislators for discussion.
The spirit of the proposal can be summarised as follows:
- for onshore private funds to enjoy the same tax incentives as offshore private funds,
- for funds to enjoy a profits tax exemption on their investment in both Hong Kong and non-Hong Kong private companies, and
- to remove the “tainting” effect whereby a tax exemption would still be available for the “good” transactions of the fund, even if it invests in “bad” transactions.
Please read our Financial Services Tax News Flash for more details and insights.