Governments worldwide are strengthening their tax enforcement efforts to combat tax evasion and increase revenue collection

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There are three main categories of tax in Hong Kong. They are Salaries Tax, Profit Tax and Property Tax. Under territorial source concept, those three kinds of income are charged on those part which derived from or arisen in Hong Kong. Hong Kong does not have Capital Gain Tax, Dividend Income Tax, Goods & Services Tax (GST), Vaule Added Tax (VAT).

Current standard rate of Profit Tax for Sole Proprietor or Partnership business is 15% (tax rate for first HK$2,000,000 assessable income is only 7.5%, subjected to certain conditions)

Current standard rate of Profit Tax for Limited Company is 16.5% (tax rate for first HK$2,000,000 assessable income is only 8.25%, subjected to certain conditions) Current tax rate for Individual on Salaries Tax start from 2% to 17% aggressively (first HK$50,000 subjected to 2%; second HK$50,000 subjected to 6%; third HK$50,000 subjected to 10%; Fourth HK$50,00 subjected to 14%; all reminder salary income subjected to 17%. Standard tax rate for Salaries Tax is 15%)

Specified Foreign-sourced Income

International tax standards now require that taxpayers benefitting from preferential treatment have substantial economic presence and a clear link between income and local activities. Supporting global efforts against tax evasion and double non-taxation, Hong Kong amended its Foreign Source Income Exemption (FSIE) regime following EU guidance

The 2022 Amendment Ordinance (effective 1 January 2023) introduced an FSIE regime for foreign-sourced dividends, interest, IP income, and equity disposal gains received in Hong Kong by MNE entities

In December 2022, the EU updated its FSIE guidance to explicitly include disposal gains as passive income, requesting jurisdictions like Hong Kong to further amend their rules by end-2023 for January 2024 implementation

Accordingly, the 2023 Amendment Ordinance (enacted 8 December 2023, effective 1 January 2024) expanded the scope of foreign-sourced disposal gains to cover all property types. The existing exception requirements—economic substance, participation, and nexus—remain unchanged and apply universally. A new intra-group transfer relief defers tax on transfers between associated entities, subject to anti-abuse rules。

61 states that

"Where an assessor is of opinion that any transaction which reduces or would reduce the amount of tax payable by any person is artificial or fictitious or that any disposition is not in fact given effect to, he may disregard any such transaction or disposition and the person concerned shall be assessable accordingly."

61 states that

"Where an assessor is of opinion that any transaction which reduces or would reduce the amount of tax payable by any person is artificial or fictitious or that any disposition is not in fact given effect to, he may disregard any such transaction or disposition and the person concerned shall be assessable accordingly."