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Publications and Press Releases :
Press Release
: News Archives
Consultation on Exemption of Offshore Funds from
Profits Tax
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The Financial Services and the Treasury Bureau (FSTB)
issued a paper today (January 14) for a one-month consultation on
the proposed amendments to the Inland Revenue Ordinance (IRO) for
exempting offshore funds from profits tax.
"The proposal, announced by the Financial Secretary in the
2003-04 Budget, aims to reinforce the status of Hong Kong as an
international financial centre by increasing its attractiveness
to offshore fund managers," Mr Frederick Ma, the Secretary
for Financial Services and the Treasury, said.
"This legislative amendment exercise will bring Hong Kong into
line with major international financial centres such as New York
and London where offshore funds meeting specific requirements are
not subject to tax," he said.
The proposed amendments to the IRO seek to exempt fund entities
and non-fund entities resident outside Hong Kong from profits tax
in respect of any income derived from transactions undertaken in
Hong Kong through a broker or an approved investment adviser. To
prevent round-tripping by local funds, anti-avoidance measures are
also proposed.
Mr Ma said, "Granting profits tax exemption to trading gains
of offshore investors would help promote the development of the
fund management industry in Hong Kong. We look forward to receiving
market comments on the proposed legislative amendments."
"We will continue to work with the industry to identify other
measures to enhance our competitiveness as a world class asset management
centre in the region.
"Subject to the outcome of the consultation, we will work towards
an early introduction of the Inland Revenue (Amendment) Bill into
the Legislative Council," he added.
The consultation paper is available on the website of FSTB. Interested
parties are invited to send their comments to FSTB by February 13,
2004.
Ends/Wednesday, January 14, 2004
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