Canada and Hong Kong end expats' double tax whammy
Trade and investment expected to be boosted as city signs agreement No 26 on taxation
Hong Kong and Canada have signed a treaty to avoid double taxation and increase trade between the two economies.
Currently, income earned by Canadians in Hong Kong who are still deemed residents of Canada is taxable both here and at home.
Under the deal, the tax they pay here can be offset against tax payable in Canada. The same applies for certain Hongkongers working in Canada.
The pact was sealed yesterday during Canadian Prime Minister Stephen Harper's visit to the city, his second since he took office in 2006. It was Hong Kong's 26th such deal and it also has implications for some corporate taxes. The city has previously signed treaties with countries such as Britain, mainland China, Japan and France, and is negotiating with others.
Professor Chan Ka-keung, Secretary for Financial Services and the Treasury, signed the pact with Canada's trade minister, Edward Fast.
Harper, who witnessed the signing ceremony with Chief Executive Leung Chun-ying, said: "This will increase trade and investment flows while reducing incidents of double taxation and tax evasion."