Review of Economic Substance for Hong Kong FSIE (Foreign Source Income Exemption) purpose

Further to our newsletter issued on 7 October 2022, we have received a lot of clients’ enquiries about the Economic Substance requirement for the income exemption purpose.

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We are pleased to announce good news that the Commissioner of the Hong Kong Inland Revenue Department offers an early ruling on the Economic Substance of taxpayers from now till the end of December 2022. Once a ruling is issued to confirm the taxpayer’s Economic Substance in Hong Kong, the ruling may be used for up to 5 consecutive years of assessment unless the taxpayers change its substance afterwards.

If you or your clients are puzzled how to meet the Economic Substance requirement, please grasp the chance to contact Portcullis for obtaining the early ruling.

Our fee for assistance is within the range of USD645 to USD3,200 and depends on below factors:

1. Individual application or Group application
2. Whether the applicant company is a pure equity holding company
3. Type of income: Interest income, dividend, disposal gains
4. Estimated total annual amount of income for all the concerned income in the coming 5 years (from 2023 onwards)

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Please note that once the FSIE becomes effective on 1 January 2023, the aforesaid early ruling will no longer be available. All taxpayers have to pay for a high fee to the Inland Revenue Department to apply for Advance Ruling. It is uncertain whether the result from the Advance Ruling can be same as the early ruling valid for up to 5 years of assessment.

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Please feel free to reach below contact person for further details:
Pisces Wong | Senior Accounts and Tax Manager
Portcullis Tax Services (HK) Limited
15/F, BOC Group Life Assurance Tower,
No. 136 Des Voeux Road Central, Central, Hong Kong
Tel: (852) 2525 9991 | Direct Line: (852) 3173 1046
Email: pisces.wong@portcullis.co

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就豁免离岸被动收入征税而检视经济实体

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继我司于2022年10 月7 日向客户发出的新闻稿后, 我们陆续收到不少客户向我们查询如何符合「经济实体」从而获得相关收入豁免。

我们很高兴通知各大客户好消息! 香港税务局由现在至2022年12月31 日内就新法例下为纳税人评估其经济实体条件。一旦税务局局长发表意见确认纳税人的经济实体条件, 除非纳税人其后更改其运作实体状况, 否则该局长意见或能用达连续5个税务年度。

若阁下或阁下的客户正困惑其业务运作是否符合新例下的经济实体条件, 请把握这黄金机会联系保得利以协助取得税务局局长意见。

我们的收费由USD645至3,200不等, 视乎以下因素：

1. 是否就单一企业申请？ 还是为同一集团的几家香港企业申请?
2. 是否纯股权持有实体?
3. 收入种类：利息、股息、转让获利
4. 预计未来5年 (由2023年起计) 有关收入的总款额

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请注意, FSIE 新法例于2023年1月1日正式生效后, 上述税务局局长意见评估将不再提供予纳税人。 介时, 纳税人须另付高昂费用, 循另一途径 ─「事先裁定」才能取得税务局意见, 且暂未知依循该途径获得的意见之有效期是否达5个课税年度。

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若阁下对上述有任何查询, 欢迎联系：

黄英妍
资深会计及税务经理
中环德辅道中134-136号中银集团人寿保险大厦15楼
电话: (852) 2525 9991 [直线: (852) 3173 1046]
电邮: pisces.wong@portcullis.co