Hong Kong Advance Ruling on Whether Sale of a Long-Held Equity Interest Qualifies as a Non-Taxable Capital Gain

The Hong Kong Inland Revenue Department has issued an advance ruling originally issued on 28 November 2025 on whether a company's gain from selling a long-held equity interest qualifies as a non-taxable capital gain.

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Advance Ruling Case No. 77

1. The provisions of the Ordinance

The ruling applies in respect of section 40AX of and Schedule 17K to the Inland Revenue Ordinance ("IRO").

2. Background

(a) The Applicant is a limited company incorporated overseas and registered as a no…