Tax Breakfast: Let’s Talk about Tax in Hong Kong 2024/25

Almost half a year has passed since the 2024/25 Hong Kong Budget was unveiled by Financial Secretary Paul Chan Mo-po. The Budget was aimed at solidifying the city's recovery and to spur economic growth. In tandem with the Budget's objectives, a suite of tax measures have been unveiled. Our tax breakfast now looks to delve into these measures, providing a mid-year status update of the tax developments in 2024/25 so far.

While there are a vast array of measures, our seminar will specifically cover the following topics:

• Proposed Company Re-domiciliation Regime & New BVI Annual Returns Filing Requirement – The policy intent of the proposed company re-domiciliation regime is to provide a straightforward and simple route for non-Hong Kong companies to transfer their domicile to Hong Kong. This new proposed regime has become even more relevant in light of the new requirements where all BVI registered companies must now prepare an annual return, which may spur more business to opt for re-domiciliation in Hong Kong.
• Proposed Hong Kong Patent Box Tax Incentive – The incentive aims to reduce the tax rate for Hong Kong sourced profits derived from the use or sale of qualifying IP to 5%;
• Single Family Office Tax Concession – Under the proposed regime, eligible Family-owned Investment Holding Vehicles ("FIHVs") and their Family-owned Special Purpose Entities ('FSPEs') managed by eligible Single Family Offices ("SFOs") in Hong Kong will be exempt from Hong Kong profits tax on investment profits, upon meeting certain conditions; and
• Refined Foreign Sourced Income Exemption ("FSIE") Regime and Enhancement Scheme – Refinements to Hong Kong's FSIE regime for four types of offshore income, namely (1) interest, (2) dividends, (3) disposal gains from the sale of equity interests, and (4) income from intellectual property ("IP") together with a tax certainty enhancement scheme for onshore equity disposal gains.