The Agreement between the Government of the Hong Kong Special Administrative Region of the People's Republic of China and the Government of the United Mexican States for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income ("the Agreement") was formally signed on 18 June 2012.

According to Article 28 of the Agreement, the Agreement shall, upon the written notifications by both Sides of the completion of their respective required domestic procedures, enter into force thirty days after the date of receipt of the later of these notifications.

For the purpose of giving effect to the Agreement, an Order was made by the Chief Executive in Council on 9 October 2012, under section 49(1A) of the Inland Revenue Ordinance. The Order was published in the Gazette as Legal Notice 160 of 2012. The Order was laid before the Legislative Council for negative vetting on 24 October 2012. The vetting period expired on 21 November 2012 and no resolution was made by the Legislative Council to amend the whole or any part of the Order. Thereafter, the Order came into operation on 14 December 2012. On 18 December 2012, Hong Kong sent a notification of the completion of the domestic procedures to Mexico. On 5 February 2013, Hong Kong received a notification dated 4 February 2013 from Mexico confirming the completion of the requisite domestic procedures. The Agreement has therefore become effective on 7 March 2013 and shall have effect in Hong Kong, according to paragraph 2 of Article 28 of the Agreement, for any year of assessment beginning on or after 1 April 2014.

Hong Kong signed on January 14 an agreement with Italy for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. Please click here for the details.

The Agreement between the Government of the Hong Kong Special Administrative Region of the People’s Republic of China and the Government of the French Republic for the Avoidance of Double Taxation with respect to Taxes on Income and on Capital and the Prevention of Fiscal Evasion (“the Agreement”) has come into effect in Hong Kong from year of assessment 2012/13.

Hong Kong has now sought clarification from France that a Hong Kong resident corporation is exempt from branch remittance tax on its income earned in France under the provisions of the Agreement.   

Income earned in France by a foreign corporation is deemed to be distributed to a foreign resident under the French tax code.  In the absence of the Agreement, a 25% withholding tax (branch remittance tax) is levied on that after-tax income as if it were dividends.  The withholding tax can be recalculated if the enterprise proves that the income taxed exceeds the amount of the dividends effectively paid or that the dividends are paid to French residents.

Under the Agreement, paragraph 3 of Article 10 states that the term “dividends” also includes “income treated as a distribution by the taxation laws of the Contracting Party of which the company making the distribution is a resident”.  Paragraph 5 of Article 10 however stipulates that “where a company which is a resident of a Contracting Party derives profits or income from the other Contracting Party, that other Party may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a resident of that other Party or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment situated in that other Party, nor subject the company’s undistributed profits to a tax on the company’s undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other Party.”

Therefore, in accordance with the above provisions of the Agreement, French branch remittance tax cannot be levied on the income earned in France by a Hong Kong resident corporation.

Hong Kong signed on November 11 an agreement with Canada for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. Please click here for the details.

The Agreement between the Government of the Hong Kong Special Administrative Region of the People's Republic of China and the Swiss Federal Council for the Avoidance of Double Taxation with respect to Taxes on Income ("the Agreement") was formally signed on 4 October 2011.

According to Article 28 of the Agreement, the Agreement shall, upon the written notifications by both Sides of the completion of their respective required domestic procedures, enter into force on the date of the later of these notifications.

For the purpose of giving effect to the Agreement, an Order was made by the Chief Executive in Council on 17 April 2012, under section 49(1A) of the Inland Revenue Ordinance. The Order was published in the Gazette as Legal Notice 97 of 2012. The Order was laid before the Legislative Council for negative vetting on 23 May 2012. The vetting period expired on 20 June 2012 and no resolution was made by the Legislative Council to amend the whole or any part of the Order. Thereafter, the Order came into operation on 13 July 2012. On 18 July 2012, Hong Kong sent a notification of the completion of the domestic procedures to Switzerland. Hong Kong also received a notification dated 15 October 2012 from Switzerland confirming the completion of the requisite domestic procedures. The Agreement has therefore become effective on 15 October 2012 and shall have effect in Hong Kong, according to paragraph 2 of Article 28 of the Agreement, for any year of assessment beginning on or after 1 April 2013.

The Agreement between the Government of the Hong Kong Special Administrative Region of the People's Republic of China and the Government of Malta for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income ("the Agreement") was formally signed on 8 November 2011.

According to Article 26 of the Agreement, the Agreement shall, upon the written notifications by both Sides of the completion of their respective required domestic procedures, enter into force on the date of the later of these notifications.

For the purpose of giving effect to the Agreement, an Order was made by the Chief Executive in Council on 17 April 2012, under section 49(1A) of the Inland Revenue Ordinance. The Order was published in the Gazette as Legal Notice 98 of 2012. The Order was laid before the Legislative Council for negative vetting on 23 May 2012. The vetting period expired on 20 June 2012 and no resolution was made by the Legislative Council to amend the whole or any part of the Order. Thereafter, the Order came into operation on 13 July 2012. Hong Kong received a notification dated 12 December 2011 from Malta confirming the completion of the requisite domestic procedures. On 18 July 2012, Hong Kong sent a notification of the completion of the domestic procedures to Malta. The Agreement has therefore become effective on 18 July 2012 and shall have effect in Hong Kong, according to paragraph 2 of Article 26 of the Agreement, for any year of assessment beginning on or after 1 April 2013.

Hong Kong signed on June 18 (Mexican time) an agreement with Mexico for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. Please click here for the details.

The Agreement between the Hong Kong Special Administrative Region of the People's Republic of China and the Portuguese Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income ("the Agreement") was formally signed on 22 March 2011.
According to Article 28 of the Agreement, the Agreement shall, upon the written notifications by both Sides of the completion of their respective required domestic procedures, enter into force on the thirtieth day following the date of the latter notification.
For the purpose of giving effect to the Agreement, an Order was made by the Chief Executive in Council on 8 November 2011, under section 49(1A) of the Inland Revenue Ordinance. The Order was published in the Gazette as Legal Notice 155 of 2011. The Order was laid before the Legislative Council for negative vetting on 23 November 2011. The vetting period expired on 11 January 2012 and no resolution was made by the Legislative Council to amend the whole or any part of the Order. On 13 January 2012, Hong Kong sent a notification of the completion of the domestic procedures to Portugal. On 4 May 2012, Hong Kong received a notification dated 4 May 2012 from Portugal confirming the completion of the requisite domestic procedures. The Agreement has therefore become effective on 3 June 2012 and shall have effect in Hong Kong, according to paragraph 2 of Article 28 of the Agreement, for any year of assessment beginning on or after 1 April 2013.

Hong Kong signed on April 25 an agreement with Malaysia for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. Please click here for the details.

The Agreement between the Government of the Hong Kong Special Administrative Region of the People's Republic of China and the Government of the Republic of Indonesia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income ("the Agreement") was formally signed on 23 March 2010.

According to Article 28 of the Agreement, the Agreement shall, upon the written notifications by both sides of the completion of their respective required approval procedures, enter into force on the date of the later of these notifications.

For the purposes of giving effect to the Agreement, an Order was made by the Chief Executive in Council on 22 June 2010, under section 49(1A) of the Inland Revenue Ordinance. The Order was published in the Gazette as Legal Notice 91 of 2010. The Order was laid before the Legislative Council for negative vetting on 14 July 2010. The vetting period expired on 17 November 2010 and no resolution was made by the Legislative Council to amend the whole or any part of the Order. On 19 November 2010, Hong Kong sent a notification of the completion of the ratification procedures to Indonesia. In early April 2012, Hong Kong received a notification dated 28 March 2012 from Indonesia confirming the completion of the requisite approval procedures. The Agreement has therefore become effective on 28 March 2012 and shall have effect in Hong Kong, according to paragraph 2 of Article 28 of the Agreement, for any year of assessment beginning on or after 1 April 2013.

Please click here for the Note from Japan to the Hong Kong Special Administrative Region dated 31 March 2012 and the Hong Kong Special Administrative Region's Note in reply dated 31 March 2012 regarding Article 11 of the Agreement between the Government of the Hong Kong Special Administrative Region of the People's Republic of China and the Government of Japan for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income.