As previously reported, the Financial Services and the Treasury Bureau (the “FSTB”) of the Government of HKSAR proposed to amend the Inland Revenue Ordinance (Cap. 112) to provide tax concessions for carried interest distributed by eligible private equity funds operating in Hong Kong.
On 7 May 2021, the Inland Revenue (Amendment) (Tax Concessions for Carried Interest) Ordinance came into operation introducing the much-anticipated Carried Interest Tax Concession Regime (the “Regime”).
The Regime operates to provide tax concession at both the salaries tax and profits tax levels. Eligible Carried Interest will be taxed at 0% profits tax rate and all of the Eligible Carried Interest would also be excluded from computation in the calculation of salaries tax.
We set out in the table below a summary of the key aspects of the Regime:
|Eligible Carried Interest||
|Substantial activities in Hong Kong||
During the period of assessment, Qualifying Recipients must demonstrate:-
For assistance with setting up or restructuring of an investment fund or to obtain your certification for the carried interest concession, please contact us today.