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May 23, 2023
Hong Kong passes bill on tax concessions for Family-owned Investment Holding Vehicles
The Hong Kong "Inland Revenue (Amendment) (Tax Concessions for Family-owned Investment Holding Vehicles) Ordinance 2023" (the New Law) was gazetted on 19 May 2023 and will take retroactive effect from 1 April 2022. The New Law introduces a dedicated tax-concession regime for Family-owned Investment Holding Vehicles (FIHVs) managed by eligible single-family offices (ESFOs) in Hong Kong. Upon making an irrevocable election in writing, an FIHV managed by an ESFO in Hong Kong will be taxed at a 0% concessionary tax rate on its assessable profits derived from qualifying transactions and incidental transactions, subject to a 5% threshold.
The New Law enacts the key provisions outlined in our earlier Global Tax Alert1 (highlighting the proposed bill) and incorporates the following flexibilities proposed in the Committee Stage Amendments:
For additional information with respect to this Alert, please contact the following:
Ernst & Young Tax Services Limited, Hong Kong
Ernst & Young LLP (United States), Hong Kong Tax Desk, New York
Ernst & Young LLP (United States), Asia Pacific Business Group, New York
Ernst & Young LLP (United States), Asia Pacific Business Group, Chicago
Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor
1 See EY Global Tax Alert, Hong Kong introduces bill on tax concessions for family-owned investment holding vehicles, dated 23 December 2022.