Advertisement
Advertisement

HK to sign agreement with Thailand on double taxation

Updated at 6.14pm: Hong Kong and Thailand this week will sign an agreement on the avoidance of double taxation - designed to help SAR businessmen who are planning to invest in the kingdom.

Secretary for Financial Services and Treasury Frederick Ma Si-hang will leave for Bangkok on Wednesday to sign the agreement with Thailand's Minister of Foreign Affairs of Thailand, Dr Kantathi Suphamongkon.

'The agreement will provide a further level of certainty in tax liability and bring about certain tax savings to Hong Kong investors doing business in Thailand,'' a government spokesman said on Tuesday.

This is the first comprehensive agreement for the avoidance of double taxation (CDTA) that Hong Kong has concluded with an economy in the Asia-Pacific region. It is the second agreement since the government began to explore the possibilities of establishing a network of CDTAs with major trading partners in 1998.

The spokesman said the first CDTA was signed in 2003 with Belgium. 'The government is keen to establish a network of CDTAs with Hong Kong's trading partners, as these agreements would provide certainty and stability to investors, and enhance trade and economic ties with other economies,' Mr Ma said.

Besides the CDTAs with Belgium and Thailand, talks on avoidance of double taxation have been held with Macau, Vietnam and some member economies of the Organisation for Economic Co-operation and Development (OECD) since 1998.

Discussions are also being held with China to expand the existing limited avoidance of double taxation arrangement, signed in 1998, into a comprehensive one to provide further tax relief to Hong Kong and mainland businessmen.

Double taxation usually means the taxation of the same earnings at two levels - or in this case taxation of foreign investments in the country of origin and then again upon repatriation.

Post