According to recent reports, officials from Hong Kong and Bangladesh will meet from July 31 to August 1 for a second round of negotiations on the tax treaty. The treaty will be the first of its kind between the two countries. If you consider that you have not benefited from the adequate double taxation exemption guaranteed by a double taxation agreement, you can benefit from the assistance of the Hong Kong authority responsible for the convention. The competent authority of Hong Kong is the Commissioner of Domestic Revenues. This process is also called the mutual agreement procedure. The hong kong competent authority is responsible for the following issues: Hong Kong`s tax authorities have made significant ongoing efforts to eliminate double taxation whenever possible, as shown by the countless tax breaks. These measures include national legislation providing for unilateral relief, comprehensive double taxation conventions, bilateral air services agreements, maritime revenue agreements and advanced pricing agreements. Hong Kong relies on the basis of the territoriality of taxation, which provides that only income received within Hong Kong is subject to any type of tax (tax on profits or wages). This principle generally ensures that most Hong Kong residents do not suffer from double taxation.
A complete list of global double taxation treaties is available on the website of the National Ministry of Revenue. Here you will find a list of the global double taxation treaties currently under negotiation. Advanced price agreements are another instrument to help companies reduce the risk of double taxation. An extended pricing agreement is an agreement between a taxable company and the tax authorities, in this case the National Ministry of Revenue, on the transfer pricing methodology of a fixed schedule of related party transactions (e.g. B a multinational parent and its subsidiary in Hong Kong). They point out that if cross-border investment returns were doubly taxed, global economic growth and expansion would be seriously hampered. Tax treaties between countries aim to avoid such double taxation. Hong Kong has an extensive network of such contracts. These contracts have strengthened its position as the economic hub of Southeast Asia and helped remove tax barriers that hinder the cross-border flow of trade, investment, technical know-how and expertise between Hong Kong and the rest of the world. Methods of reducing double taxation are imposed either by a country`s national tax legislation or by the specific DBA. Generally speaking, there are four methods to reduce double taxation.
Despite the low risk of double taxation in Hong Kong, the government has signed an extensive network of comprehensive double taxation treaties due to the safety and risk reduction of investors. Among the advantages, the Hong Kong Tax Treaty Network attempts to remove the obstacle to double taxation of foreign investment by helping to structure transactions at minimal tax cost. Airlines (such as passenger airlines, air cargo, etc.) may be more vulnerable to double taxation due to the international nature of their operations. Bilateral air services agreements have been concluded because they need to be negotiated and concluded much more quickly than double taxation treaties. Hong Kong has concluded bilateral air services agreements with Bangladesh, Belgium, Canada, Croatia, Denmark, Estonia, Ethiopia, Fiji, Finland, Germany, Iceland, Israel, Jordan, Kenya, Kuwait, Laos, Macao SAR, mainland China, Maldives, Mauritius, Mexico, Netherlands, New Zealand, Norway, Russian Federation, Seychelles, South Korea, Sweden, Switzerland and the United Kingdom. . . .