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What Is the Nexus Requirement for IP Income in Hong Kong?
What Is the Nexus Requirement for IP Income in Hong Kong?Under Hong Kong’s FSIE regime, the nexus requirement limits the amount of foreign-sourced IP income that can qualify for exemption based on the proportion of qualifying R&D expenditure incurred in developing the relevant IP asset.Qualifying expenditure generally includes R&D activities carried out by:The Hong Kong entity itself;An associated person; orA non-associated person.The greater the proportion of qualifying R&D expenditure relative to the total expenditure incurred to develop the IP asset, the greater the proportion of IP income…
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