Further to the implementation of the Foreign-Sourced Income Exemption (“FSIE”) regime on 1 January 2023, the Inland Revenue (Amendment) (Taxation on Foreignsourced Disposal Gains) Bill 2023 (the “Bill”) was passed on 29 November 2023.

The FSIE regime effective from 1 January 2023 onwards deems four types of offshore passive income (i.e. interest income, income from intellectual properties, dividends and disposal gains on equity interests) received in Hong Kong by an MNE entity of a multinational enterprise group to be chargeable to Hong Kong Profits Tax unless certain exemption requirement is met.