The Financial Services & the Treasury Bureau announced today that the Government will launch a consultation in mid-March on an initiative to enhance the tax certainty of onshore gains on the disposal of equity interests.
To increase the attractiveness of Hong Kong as an international investment and business hub, the Government will propose an enhancement initiative to provide clearer guidance as to whether the gains are subject to tax.
The bureau explained that as an appealing world-class business city, Hong Kong has been practising a simple and low tax regime. The initiative will not only facilitate businesses in expansion and restructuring through the disposal of equity interests, but also provide more tax transparency, lower the compliance cost of businesses, and increase the competitiveness of Hong Kong’s tax system.
During the earlier legislative exercise on the Inland Revenue (Amendment) (Taxation on Specified Foreign-sourced Income) Bill 2022, the Government put forward that it would look into appropriate measures to enhance the tax certainty for onshore gains made from transactions in respect of the disposal of equity interests.
The Government said this is in line with the views of the sector, which were gathered during the consultation period of the bill.