Three separate regimes drive the effective profits tax rate of a Hong Kong company that earns from intellectual property and from passive income. The patent box gives 5% on the concessionary portion of IP income. The two-tiered profits tax rates give 8.25% on the first HKD 2,000,000 of assessable profits and 16.5% above. FSIE is not a relief at all: it deems specified foreign-sourced dividends, interest, IP income and disposal gains received in Hong Kong by a member of an MNE group to be Hong Kong sourced unless an exception is met.
