James Lau, right, Secretary for Financial Services and the Treasury of Hong Kong, exchanges documents with Jari Sinkari, Consul-General of Finland in Hong Kong after signing a comprehensive avoidance of double taxation agreement, May 24, 2018. (PHOTO / INFORMATION SERVICES DEPARTMENT, HKSAR)
HONG KONG – Hong Kong and Finland Thursday signed a comprehensive agreement for the avoidance of double taxation, further expanding the city’s tax treaty network.
Hong Kong has all along treasured the economic and trade ties with Finland, and I have every confidence that the signing of the CDTA will bring our bilateral relations to a new level.
James Lau, Secretary for Financial Services and the Treasury, HKSAR
The agreement will come into force after the completion of ratification procedures on both sides, according to a government news release.
Secretary for Financial Services and the Treasury of the Hong Kong Special Administrative Region (HKSAR) James Lau and Finnish Consul-General Jari Sinkari signed the agreement known as comprehensive avoidance of double taxation agreement (CDTA).
The document sets out the allocation of taxing rights between the two jurisdictions, which will help investors better assess their potential tax liabilities from cross-boundary economic activities.
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It is the 40th tax agreement Hong Kong has signed with its trading partners, including the 16 member states of the European Union, said the release.
Under it, any Finnish tax paid by Hong Kong companies will be allowed as a credit against the tax payable in Hong Kong on the same profits, subject to the provisions of Hong Kong tax laws.
For Finnish companies, the tax they pay in Hong Kong will be allowed as a deduction from the tax payable on the same income in Finland.
"Hong Kong has all along treasured the economic and trade ties with Finland, and I have every confidence that the signing of the CDTA will bring our bilateral relations to a new level," said Lau.
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For Hong Kong, it will be implemented by an order to be made by the Chief Executive in Council under the Inland Revenue Ordinance, subject to vetting by the Legislative Council.
In 2017, Finland was Hong Kong's 50th largest trading partner.
*With inputs from Xinhua
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