The agreement for the avoidance of double taxation between India and Hong Kong allows investors from both countries to benefit from a range of tax benefits and actual double tax relief, in those situations where permanent establishments derive income from both jurisdictions.
Hong Kong has signed over eighty double tax treaties that allow for better economic cooperation and for the prevention of fiscal evasion. Our team of lawyers in Hong Kong can give you detailed information about how these apply to a particular type of company.
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The Hong Kong – India double tax treaty
The agreement for the avoidance of double taxation and the prevention of fiscal evasion is meant to improve the economic relations between Hong Kong and India. The document was signed by the Indian Ambassador to China and Hong Kong’s Finance Secretary. The double tax treaty (DTA) is meant to improve the level of tax transparency and make it easier for Hong Kong companies to do business in India and vice versa.
The taxes for which the DTA will apply in case of Hong Kong are the profits tax, the property tax, and the salaries tax. Profits like those from business activities, air and shipping profits, director’s fees, pensions, income from dividends and others will all fall under the provisions of the treaty.
One of our attorneys in Hong Kong can give you more information about how the provisions of this treaty will apply for an Indian business in Hong Kong
Taxation in Hong Kong
Hong Kong has a low taxation regime, one of the many characteristics that make it an attractive investment location. The tax on profits is levied only on the income derived from the Special Administrative Region. The taxes for companies include the corporate income tax (16.5%), the real estate tax and social security contributions.
For more detailed information about the taxation system the accounting and reporting requirements as well as other matters, please do not hesitate to contact our law firm in Hong Kong.