Hong Kong: Legislation to clarify non-taxation of onshore equity disposal gains enacted
Onshore gains from disposals of equity interests will be regarded as capital in nature and non-taxable if bright-line test is met
Onshore gains from disposals of equity interests will be regarded as capital in nature
Legislation to clarify the non-taxation of onshore equity disposal gains in Hong Kong was enacted into law on 15 December 2023.
The draft legislation was published in the official gazette on 20 October 2023, and on the same day, the Inland Revenue Department (IRD) published related guidance, “frequently asked questions” (FAQs), and illustrative examples on its website. Read TaxNewsFlash
Under the legislation, onshore gains from disposals of equity interests occurring on or after 1 January 2024 will be regarded as capital in nature and non-taxable if the bright-line test with the equity holding conditions (i.e., an ownership threshold of at least 15% and a holding period of at least 24 months before disposal) is met, subject to certain exclusions.
For more information, contact a KPMG tax professional:
David Ling | davidxling@kpmg.com
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