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HK’s New Foreign-sourced Income Exemption (FSIE) Regime

29 November 2022

Further to the consultation launched by the Hong Kong SAR Government on the proposed FSIE regime in June 2022, the Inland Revenue (Amendment) (Taxation on Specified Foreign-sourced Income) Bill 2022 (the Bill) was gazetted on 28 October 2022. The new FSIE regime would take place with effect from 1 January 2023.

Corporate groups operating in multiple jurisdictions are expected to accrue/receive the specified foreign-sourced income in Hong Kong (i.e. interest, intellectual property income, dividends and disposal gains derived from the sale of an equity interest) that would be covered by the FSIE regime where tax exemption would continue to be available if certain conditions are met.



The Bill is more than 70 pages long, making it one of the most significant amendments to the Inland Revenue Ordinance (IRO). As part of a follow-up to the webinar held in August 2022, KPMG speakers provided an update and an overview of the Bill, together with the administrative guidance that the IRD has published. They also shared their views on practical considerations to prepare yourself to embrace the new era of Hong Kong taxation.​

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