By Vlad Cuc, specialist in company formation matters
Avoid double taxation in Hong Kong
Hong Kong has a double taxation relief policy, meaning that double taxation will not arise when two different tax jurisdictions overlap. This allows companies that have multiple headquarters to avoid taxation in all the countries where they produce profit.
Hong Kong has a territorial taxation and only the profit/income
produced in Hong Kong is subject to the applicable taxation principles. In most cases, company income from
sources other than Hong Kong is not taxed.
Double taxation agreements in Hong Kong
The Hong Kong Special Administrative Region Government concluded several comprehensive double taxation agreements/arrangements with Hong Kong’s trading partners. DTAs or tax treaties prevent double taxation and fiscal evasion. They are also an important tool for increasing the cooperation between Hong Kong and other international tax administrations. A DTA produces effects for resident Hong Kong companies and companies resident in a jurisdiction where a DTA is in force.
A
double taxation agreement is useful for foreign investors not only because it allows for taxes to be paid only once, but also because they can assess their tax liabilities according to the type of activity they
perform in Hong Kong and other partner countries.
Branches and
subsidiaries in Hong Kong also benefit from these agreements.
Our CPA in Hong Kong can give you complete details about the provisions of a specific double tax treaty and how this can affect your international business. We offer advice and assistance to companies interested in preparing the annual financial statements and maintaining proper books of account. You can contact us for more information about our accounting solutions.
Double taxation agreements concluded by Hong Kong
Hong Kong has signed 30 double tax agreements and negotiations are being held to sign even more agreements with other countries. The concluded comprehensive
double taxation agreements are with: Austria, Belgium, Brunei,
Canada, the Czech Republic, France, Guernsey, Hungary, Indonesia, Ireland, Italy, Japan, Jersey, Korea, Kuwait, Liechtenstein, Luxembourg, Mainland China, Malaysia,
Malta, Mexico, the Netherlands, Portugal, Qatar, South Africa, Spain, Switzerland, Thailand, the United Kingdom, Vietnam (pending).
Negotiations are in progress with countries like Germany, Finland, Romania, Russia, the United Arab Emirates and others.
