Overview
- The Inland Revenue Amendment Bill, which was gazetted in mid-June and moved through a second reading in the Legislative Council in late June, is expected by market advisers to pass soon though it has not yet become law.
- If approved, the measure would remove salary tax on managers’ performance-linked bonuses and exempt funds from tax on performance fees and carried interest, subject to eligibility rules in the draft.
- The proposal would apply retroactively to April 2025, creating an immediate incentive for managers and funds to consider relocating staff or redomiciling entities to capture past-year relief.
- Singapore has opened consultations on possible tax cuts and looser foreign-talent rules as a direct policy response, showing the move could trigger regional competition for asset-management talent.
- Hong Kong frames the change as part of a push to expand its wealth-management and digital-asset fund business, and the rule would materially alter pay economics for managers because carried interest often forms the largest share of their compensation.