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Hong Kong Gazettes ETF Stamp Duty Exemption

by Mary Swire, Tax-News.com, Hong Kong

09 December 2014


The Bill seeking to implement the stamp duty waiver for the transfer of shares or units of exchange traded funds (ETFs), as proposed in Hong Kong's 2014-15 Budget, has been gazetted and will be introduced into the Legislative Council on December 17, 2014.

The Secretary for Financial Services and the Treasury, Professor K C Chan, said: "The proposed ETF stamp duty waiver will be conducive to fostering Hong Kong's position as an asset management center and the development of our financial services sector as a whole, offering new business opportunities for market practitioners and a greater range of products for investors."

It was pointed out that the ETF sector has been growing rapidly. The number of ETFs listed in Hong Kong increased substantially from 69 at end-2010 to 121 as of September 30, 2014. The average daily turnover of ETFs also increased from HKD2.4bn (USD310m) in 2010 to HKD3.7bn in 2013, making Hong Kong one of the largest ETF centers in the Asia-Pacific region.

Since 2010, the Government has extended the stamp duty remission to ETFs with their registers of holders maintained in Hong Kong that track indices comprising not more than 40 percent in Hong Kong stocks.

In the 2014-15 Budget, it was proposed to waive the stamp duty for the transfer of all ETF shares or units, so that the transaction costs of ETFs with their registers of holders maintained in Hong Kong and with more than 40 percent of Hong Kong stocks in their portfolios can be reduced as well.

TAGS: tax | investment | business | financial services | capital markets | investment funds | stamp duty | Hong Kong | tax breaks | alternative investment | services

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