PRESS RELEASE

Government to launch trade consultation on initiative about taxation treatment of onshore gains on disposal of equity interests next month

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     The Financial Services and the Treasury Bureau announced today (February 13) that the Government will propose an initiative to enhance tax certainty of onshore gains on disposal of equity interests (the Gains) and launch a trade consultation on the initiative in mid-March.

      Hong Kong, as an appealing world-class business city, has been practising a simple and low tax regime. 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 initiative will not only facilitate businesses in expansion and restructuring through 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 Bill), the Government put forward that it would look into appropriate measures to enhance tax certainty for the onshore gains made from transactions in respect of disposal of equity interests. This is in line with the views of the trade, which were gathered during the consultation period of the Bill.

      A two-month trade consultation will start in mid-March. Community views on the initiative are welcomed.

Ends/Monday, February 13, 2023 
Issued at HKT 16:30

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