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Hong Kong signs tax treaty with Malaysia wow!

Clear the Air says: Wong’s noodles in Sze Wan Shan welcomes this treaty !
Ps
Ma Loi Sai Ah bindo aah ?

Meanwhile how about the filthy air here ?

http://7thspace.com/headlines/410920/hong_kong_signs_tax_treaty_with_mala
ysia.html

Hong Kong (HKSAR) – The Financial Secretary, Mr John C Tsang, today
(April 25) signed in Kuala Lumpur an agreement with Malaysia for the
avoidance of double taxation and the prevention of fiscal evasion with
respect to taxes on income on behalf of the Hong Kong Special
Administrative Region Government. The Malaysian Minister of Finance II,
Dato’ Seri Ahmad Husni Mohamad Hanadzlah, signed on behalf of his
Government.

This is the 24th comprehensive agreement for the avoidance of double
taxation (CDTA) concluded by Hong Kong with its trading partners, coming
after those with Belgium, Thailand, the Mainland of China, Luxembourg,
Vietnam, Brunei, the Netherlands, Indonesia, Hungary, Kuwait, Austria,
the United Kingdom, Ireland, Liechtenstein, France, Japan, New Zealand,
Portugal, Spain, the Czech Republic, Switzerland, Malta and Jersey.

Welcoming the agreement, Mr Tsang said it will further strengthen the
bilateral relationship by encouraging the flow of investment and talent
between Hong Kong and Malaysia.

In the absence of a CDTA, the profits of Hong Kong companies doing
business through a permanent establishment, such as a sales outlet, in
Malaysia may be taxed in both places if the income is Hong Kong sourced.
Under the agreement, double taxation will be avoided in that any
Malaysian tax paid by the companies will be allowed as credit against the
tax payable in Hong Kong in respect of the income, subject to the
provisions of the tax laws of Hong Kong.

In the absence of a CDTA, Hong Kong residents receiving interest from
Malaysia are subject to Malaysian withholding tax, which is currently at
15 per cent.

Under the agreement, such withholding tax rate will be capped at 10 per
cent. The interest withholding tax rate will be further reduced to 0 per
cent if the interest is paid or credited to the HKSAR Government, the
Hong Kong Monetary Authority, etc. The Malaysian withholding tax on
royalties, currently at 10 per cent, will be capped at 8 per cent.

The Malaysian withholding tax on fees for technical services, currently
at 10 per cent, will be capped at 5 per cent.

Under the CDTA, Hong Kong airlines operating flights to Malaysia will be
taxed at Hong Kong’s corporation tax rate (which is lower than that of
Malaysia). Profits from international shipping transport earned by Hong
Kong residents that arise in Malaysia, which are currently subject to tax
there, will not be taxed in Malaysia under the agreement.

The Hong Kong/Malaysia CDTA has incorporated the latest Organisation for
Economic Co-operation and Development standard on exchange of
information.

The Hong Kong/Malaysia CDTA will come into force after the completion of
ratification procedures on both sides. In the case of Hong Kong, an order
is required to be made by the Chief Executive in Council under the Inland
Revenue Ordinance.

The order is subject to negative vetting by the Legislative Council.

Hong Kong is actively seeking to expand its network of CDTAs with major
trading and investment partners. Where CDTA discussions with some
jurisdictions cannot be started for the time being, Hong Kong will seek
to conclude limited double taxation avoidance arrangements for airline
and shipping income with relevant partners. So far, 27 avoidance of
double taxation agreements on airline income, six agreements on shipping
income and two agreements on airline and shipping income have been
reached.

Details of the Hong Kong/Malaysia CDTA will be available on the Inland
Revenue Department’s website
(www.ird.gov.hk/eng/pdf/Agreement_Malaysia_HongKong.pdf).

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