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Hong Kong lawmakers face push to advance carried interest tax break
Industry participants say the bill, filed in June and expected to be voted on later this year, is also aimed at preventing traders from relocating to jurisdictions such as Singapore.
Hong Kong financiers are urging the city to move quickly on a proposed tax break for carried interest and performance fees earned by hedge fund and private equity managers, after Singapore introduced a competing tax-exemption scheme, according to SCMP Economy.
The Hong Kong bill was submitted to lawmakers in June and is expected to come to a vote later this year, but it has triggered debate within the finance industry over whether the exemption is too narrow and whether it is fair to exempt ultra-wealthy fund managers from tax.
Bankers and other financial professionals have warned that if the measure is delayed, traders could relocate to rival jurisdictions offering similar incentives, and Singapore’s move has been widely viewed as a challenge.
Jasmine Lee Shun-yi, vice-president of the Hong Kong Institute of Certified Public Accountants, said Hong Kong needs to proceed quickly to strengthen its position as a leading global wealth management center and to match Singapore’s action. She also argued the tax break would help attract global fund managers to base their full operations in Hong Kong and draw additional talent.