Hong Kong and South Korea have signed an agreement to halt airlines' double taxation. It is one of the first agreements the territory hopes will lead to a full international waiver of double taxes for carriers. The tax relief, included in a new air services agreement with Seoul, will take effect after Legislative Council approval. It means Hong Kong carriers will only be taxed by Hong Kong for income generated in Korea, and Hong Kong will not tax the income of Korean airlines generated in the territory. 'We welcome the agreement, which can simplify the complicated double taxation administration work,' Cathay Pacific Airways spokesman Kwan Chuk-fai said yesterday. Cathay is the only Hong Kong airline that flies to Seoul, but regional carrier Hong Kong Dragon Airlines (Dragonair) and all-cargo carrier Air Hong Kong also operate international routes. The double taxation relief provision is written into a new air agreement signed by the two governments in March to replace the previous agreement negotiated by Britain on Hong Kong's behalf. A government order would be gazetted tomorrow and tabled in the Legislative Council on June 26, a spokesman said. 'It is our policy to include provisions on double taxation relief for airline income into air services agreements negotiated between Hong Kong and our bilateral aviation partners on a case-by-case basis,' he said. Early this year, a government proposal to end double taxation on airlines was supported by industry analysts. Deloitte Touche Tohmatsu tax principal Jefferson VanderWolk said the proposal was a positive one for Hong Kong. 'Double-taxation agreements are good for business.'