On 22 May 2023, the Hong Kong Inland Revenue Department published two advance rulings dated 1 March 2023 in regard to the economic substance requirement under the new Foreign-Sourced Income Exemption (FSIE) regime introduced by the Inland Revenue (Amendment) (Taxation on Specified Foreign-sourced Income) Ordinance 2022. As previously reported, the new FSIE regime essentially provides that offshore passive income will be deemed to be sourced from Hong Kong and chargeable to profits tax if the income is received in Hong Kong by a constituent entity of an MNE group, unless certain exemption conditions (requirements) are met. These include an economic...