New profits tax exemption for private funds provides welcome boost to Hong Kong’s fund industry
New profits tax exemption for private funds provides...
Hong Kong Tax Alert - Issue 22, December 2018
On 7 December 2018, the Inland Revenue (Profits Tax Exemption for Funds) (Amendment) Bill 2018 was introduced to the Hong Kong Legislative Council which contains a new comprehensive exemption from Profits Tax for private funds operating in Hong Kong.
The new legislation contains two exemptions from Hong Kong profits tax, being:
- an exemption for funds that meet certain qualifying criteria; and
- an exemption for ‘Special Purpose Entities’ established by a qualifying fund.
The broad nature of the new exemption will provide opportunities for funds with operations in Hong Kong to simply their current operating protocols and undertake more investment related activities in Hong Kong. This is a welcome development for the Hong Kong’s fund industry.