Hong Kong, UAE Sign Double Tax Agreement
by Mary Swire, Lowtax.net, Hong Kong
15 December, 2014
As part of the Government's efforts to expand the territory's network of tax treaties, Hong Kong signed a comprehensive double taxation agreement (DTA) with the United Arab Emirates (UAE) in Dubai on December 11.
Hong Kong's Financial Secretary John C Tsang said, "The agreement will bolster the economic and trade connections between the two places and offer added incentives for companies in the UAE to do business or invest in Hong Kong, and vice versa."
"This is the 32nd CDTA that Hong Kong has signed with its trading partners," he said, adding that it sets out clearly the allocation of taxing rights between the two jurisdictions and will therefore help investors to better assess their potential tax liabilities from cross-border economic activities.
In the absence of the CDTA, income earned by UAE residents in Hong Kong is currently subject to both Hong Kong and Emirati tax, where applicable. Under the agreement, tax paid in Hong Kong will be allowed as a credit against tax payable in the UAE and vice versa. The agreement also provides a framework for the exchange of tax information between the two territories.
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