Hong Kong adopts a territorial source principle of taxation, which only taxes income earned in Hong Kong.  For a corporate carrying on trading business with contracts negotiated, concluded and effected outside Hong Kong, it is supposed to be eligible to treat the income as offshore sourced and non-taxable under Hong Kong Tax Regime.  For a corporate providing services outside Hong Kong, it should be treated as offshore sourced income. 

Meanwhile, considering numerous new developments on Hong Kong tax law and regulation, it may be a good timing to review and revisit the potential impacts to the tax position. 

In this tax forum, we would briefly recap the refined foreign-source income exemption (FSIE) regime effective from 1.1.2023, the proposed additional refinements to FSIE for Foreign-sourced Disposal Gains to be effective in 2024, tax treatment on e-commerce business income, together with discussion on some prevailing practices regarding offshore income cases, to explore the key developments should tax profession / corporate be aware of.

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