Hk Ird Double Taxation Agreements

Hk Ird Double Taxation Agreements

There are also agreements that cover both aviation and shipping revenues. Double taxation occurs when two or more tax jurisdictions overlap, so that the same item of income or profit is subject to tax. Despite this, the Government of the Hong Kong Special Administrative Region (HKSARG) recognizes that the conclusion of comprehensive double taxation agreements/arrangements (DTAs) with our trading partners is beneficial. A DTA provides investors with certainty about the taxation rights of the contracting parties; helps investors better assess their potential tax obligations for economic activities; and further encourages foreign companies to do business in Hong Kong, as well as Hong Kong companies to do business abroad. Therefore, it was HKSARG`s policy to establish a DTA network that would minimize double taxation of Hong Kong residents and residents of the DBA partner. Hong Kong has actively involved its trading partners in the negotiation of DTAs (which cover different types of income). Hong Kong adopts the territoriality tax base, with only income/profits earned in Hong Kong being subject to tax and those from premises from a source outside Hong Kong are not taxed in Hong Kong in most cases. Therefore, Hong Kong residents generally do not suffer from double taxation. Many countries that tax their residents worldwide also grant their residents operating in Hong Kong a one-sided tax credit for all Hong Kong taxes paid on Hong Kong income/profits. Hong Kong allows a deduction for foreign taxes paid on the basis of turnover on income that is also subject to tax in Hong Kong. Companies operating in Hong Kong therefore generally have no problem with double taxation of income.

Due to the international nature of air operations, airlines are more vulnerable to double taxation than other taxpayers. As the Commission might take longer to negotiate, Hong Kong`s policy had been to include double taxation relief on flight revenues in the bilateral air transport agreements negotiated between Hong Kong and aviation partners. The HKSARG welcomes your views on the general double taxation policy and the choice of negotiating partners. Returns should be addressed to the following address: In order to facilitate double taxation, a unilateral income exemption is available for work income from services provided outside the Hong Kong Special Administrative Region and for which a tax similar to the type of salary in Hong Kong has been levied and paid in the territory where the services are provided. This applies until the 2017/18 evaluation year. Shipping revenue is another issue. Hong Kong has amended the legislation to provide for reciprocal tax exemption for maritime income from 1 April 1998 in order to allow ship operators to benefit from the tax relief offered by places with similar legislation on reciprocal tax exemption. At the same time, Hong Kong has started negotiations on double taxation relief for ship income with other countries that do not provide for reciprocal tax exemption in their legislation or, even if there are mutual exemption provisions, prefer to conclude a bilateral agreement. Senior Evaluator (Tax Treaty)Tax Treaty SectionLocal Revenue Department36/F, Revenue Tower5 Gloucester Road, Wan Chai, Hong Kong Information on the ongoing negotiations and their progress is available in the following table, which is updated monthly. Double Taxation Agreements (Hong Kong) Amendment Order 2018 (New Zealand Legislation Website) The Tax Department receives your views on issues related to certain national/regional negotiations that are planned. The representation must preferably arrive at the tax office at least 2 weeks before the scheduled date of the hearing.

You need to send your statements to: You can also email the tax department at taxtt@ird.gov.hk. (The second protocol was signed by Hong Kong in Hong Kong on June 15, 2017 and by New Zealand in Wellington on June 28, 2017.) From the 2018/19 assessment year, the application for income exemption is only possible if foreign taxes have been paid in a non-CDTA member country for services provided in that country. Technically, this income exemption applies to both employment in Hong Kong and employment outside Hong Kong. However, such an exemption does not apply in practice to taxpayers employed outside Hong Kong, since in the case of employment outside Hong Kong, only income from services provided in Hong Kong is taxable. A foreign tax credit is available to Hong Kong residents in respect of income from a jurisdiction taxable in a jurisdiction that has entered into a CDTA with the Hong Kong Special Administrative Region, and the same income is subject to tax in the Hong Kong SAR. Taxpayers are required to take all reasonable steps to minimize foreign tax payable before claiming a tax credit in the Hong Kong SAR. Please click here to find out which jurisdictions have signed comprehensive double taxation treaties/agreements with Hong Kong. The Hong Kong SAR has not concluded an agreement on inheritance and gift taxes because the inheritance tax was abolished in 2006 and there is no tax on gifts. .

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