Hong Kong to include proprietary trading firms in tax-cut reforms, FT reports

The Hong Kong government is proposing a tax-cut reform for asset managers, including proprietary trading firms such as Jane Street and Citadel Securities, as a move to improve the international financial hub’s competitiveness, the Financial Times reported.

Hong Kong authorities are considering amending the proposed legislation from the previous proposal, which only provides tax exemption for private equity firms and hedge fund managers on their carried interest, the share of investment profits they receive, the report said. The new plan aims to include proprietary trading firms in this tax exemption.

To accelerate implementation and avoid introducing amendments at the last minute during the legislative council scrutinizes bills, officials may also choose to directly issue "guidelines" that clearly define the specific conditions under which traders qualify for the relevant tax concessions, the report said, but the benefits may not apply to all proprietary trading firms.

Financial Services and the Treasury Bureau said in a response to the FT that the proposed tax concessions enhancement for funds and carried interest are not limited to specific types of funds or asset management companies. Eligibility ultimately depends on whether the relevant entities and personnel meet specific requirements.

It added that the authorities will issue administrative guidance when necessary to provide further clarification and detailed explanations on the specific implementation modalities, interpretation of key concepts, and operational requirements of the tax concession measures.

𝗗𝗼𝘄𝗻𝗹𝗼𝗮𝗱 𝗧𝗵𝗲 𝗦𝘁𝗮𝗻𝗱𝗮𝗿𝗱 𝗔𝗽𝗽 ↓