PRESS RELEASE

(Source : Government Information Centre)
 

Agreement for the Avoidance of Double Taxation on Shipping Income with the UK Enters into Force

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Shipowners in Hong Kong and the United Kingdom will only need to pay tax in either Hong Kong or the UK on their income derived from the other territory from international shipping business starting from April 2002.

A Government spokesman said today (September 18), "In October last year, the HKSAR Government and the UK Government signed the Agreement for the avoidance of double taxation on revenues arising from the business of international shipping transport. The Order made by the Chief Executive in Council to give effect to the Agreement has passed through all necessary legislative procedures."

"The Agreement will apply in HK for any year of assessment from April 1, 2002; and in the UK in respect of corporation tax for any financial year from the same date and in respect of income tax and capital gains tax for any year of assessment from April 6, 2002."

"The Agreement provides in effect an exemption in one territory for profits derived by an enterprise of the other territory from the business of international shipping transport."

Shipowners in HK and the UK will, as a result, only be subject to tax in either HK or the UK on the income they derive from international shipping business.

"Together with similar arrangements with the United States and the Mainland and the confirmed provisions of reciprocal tax exemption with the tax authorities of New Zealand and South Korea, HK shipowners are exempt from tax on their international shipping income in four countries and the Mainland," the spokesman explained.

The HKSAR Government is discussing with other tax administrations arrangements for the avoidance of double taxation that will similarly benefit HK shipowners.

End/Tuesday, September 18, 2001

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