The foreign-sourced passive income tax regime introduced by Hong Kong in January 2023 has been further amended to comply with European Union requirements. It is effective from 1 January 2024. The regime expands the scope of foreign-sourced disposal gains to cover all types of property, instead of covering only disposal gains from the sale of equity interests in an entity. However, certain types of intra-group onshore equity disposal gains are deemed non-taxable capital gains. The existing exception requirements related to economic substance, participation and nexus remain unchanged and equally applicable to different types of disposal gains.
News Source：【EY 2023/12/12】