Under the updated FSIE regime, offshore in-scope passive income will be deemed to be sourced from Hong Kong and chargeable to profits tax if:
Who would continue to do business in HK after Xi wanting HK to become China and with those restrictions on FSI?
- The income is received in Hong Kong by a constituent entity of an MNE[1] group (“covered taxpayer”) irrespective of its revenue or asset size; and
- The recipient entity fails to meet the economic substance requirement for in-scope, non IP, offshore income, or fails to comply with the nexus approach for IP income.
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Who would continue to do business in HK after Xi wanting HK to become China and with those restrictions on FSI?