PRESS RELEASE

(Source : Government Information Centre)

Double tax relief arrangements gazetted Friday

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Seven orders that give effect to the Agreement for the Avoidance of Double Taxation with respect to Taxes on Income from Shipping Transport signed with Denmark and the avoidance of double taxation articles (DTA article) in the Air Services Agreements (ASAs) signed with Switzerland, Finland, Kuwait, Kenya, Iceland and Jordan will be gazetted this Friday (June 17).

"The agreements provide that the Hong Kong Special Administrative Region (HKSAR) and the respective countries will provide reciprocal tax exemption for income, profits and property of aircraft or ship operators of the other side derived from operating aircraft or ships in their own area. This is mutually beneficial to the airline or shipping businesses of both Hong Kong and the respective countries," a Government spokesman said.

"It is our policy to include provisions on double taxation relief for airline income in bilateral air services agreements negotiated between the HKSAR and our aviation partners, and to conclude avoidance of double taxation agreements for revenues arising from the operation of ships in international traffic with our shipping partners," he explained.

The Government entered into an Agreement for the Avoidance of Double Taxation with respect to Taxes on Income from Shipping Transport with Denmark on December 9, 2004. By way of exchange of letters, the Government has reached agreement with Switzerland and Finland in July and September 2004 respectively to amend the respective ASAs previously signed with Hong Kong to include a DTA article. Separately, the HKSAR entered into ASAs with a DTA Article with Kuwait, Kenya, Iceland and Jordan on April 7, May 21, August 9 and August 28, 2004 respectively.

The seven orders were made under the Inland Revenue Ordinance by the Chief Executive in Council.

The orders will be tabled at the Legislative Council next Wednesday (June 22) for negative vetting.

Ends/Wednesday, June 15, 2005

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