I. Hong Kong tax regime for funds set to change
The European Union has identified the tax regime for Hong Kong
as one of the problematics on account of its fencing features which
include preferential tax treatment for funds which is partially or
fully isolated from the domestic economy. The Hong Kong (HK
Government) drafted the bill for Inland Revenue (Profits Tax
Exemption for Funds) (Amendment) Bill 2018 which has introduced the
changes to the existing profits tax exemption for non-resident
funds.
To consolidate Hong Kong's competitive edge in the
manufacturing and management of funds and not to be put on the
EU's list of non-cooperative jurisdictions for tax purposes,
the Government announced in the 2019 Budget that a review would be
conducted on the existing tax concession arrangements applicable to
the industry with regard to the international requirements on tax
co-operation in order to address the EU's concerns. The Bill,
when enacted, will thus provide a
