carried interest tax concession

To introduce a tax concession for carried interest. Under the carried interest loophole income is taxed at the capital gains tax rate rather than the higher earned income tax rate.

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After six months of consultation the Inland Revenue Amendment Tax Concessions for Carried Interest Bill 2021 Bill providing for a tax concession for a 0.

. That is where an entity that is recipient of the carried interest return pays part of the return to. The Guidelines have signified the Hong Kong governments continuing effort in promoting the exciting tax incentive under the carried interest tax concession regime. Tax Concessions on Carried Interest for Hong Kong Funds In April 2021 the Hong Kong Inland Revenue Department IRD passed the Inland Revenue Amendment Tax Concessions for.

Overview Eligible carried interest is defined as a sum received by or accrued to a person by way of profit-related return subject to a hurdle rate which is a preferred rate of. The Carried Interest Tax Concession Regime coupled with the introduction of the limited partnership fund regime which came into force on 31 August 2020 aim to attract more. The Government today released the proposed legislation on the concessional tax treatment for carried interest in Hong Kong.

The concession applies to carried interest paid by funds that fall within the meaning of a fund in the UFE. The proposal states that the tax concession only applies to carried. Subsequent to the industry consultation in August last year the Hong Kong Government published on 28 January 2021 the Inland.

The 0 rate applies to distributions paid out of profits from. The Inland revenue Amendment Tax. In certain cases carried interest may in any event be exempt from salaries tax because it has the character of a genuine co-investment by the employee and is not therefore.

Received a preferred return at an annual rate of 6 compound interest that would also be considered carried interest. The Carried Interest Loophole and the. Under this new concession eligible carried interest received or accrued on or after from 1 April 2020 will be subject to zero percent profits tax.

Eligible Carried Interest will be taxed at 0 profits tax rate and all of the Eligible. The tax concession for a carried interest also looks through to the employees. The Regime operates to provide tax concession at both the salaries tax and profits tax levels.

Executive summary Hong Kong enacted the Inland Revenue Amendment Tax Concessions for Carried Interest Bill 2021 the New Law on 7 May 20211 The New Law provides a tax regime.

Introduction Of Carried Interest Tax Concessions For Hong Kong Private Equity Funds