In addition, Hong Kong airlines that fly to Brunei are taxed according to the DBA at the Hong Kong corporate tax rate (lower than Brunei). Profits from international shipping made by Hong Kong residents, but which are currently taxable in Brunei, are exempt under the agreement. Income taxation can be a problem for international workers and individuals who may reside in more than one country. In countries that are taxed around the world, a non-resident citizen who works abroad may have to pay his income, both in his country of origin and in the country where he is earned. In June 2001, Hong Kong concluded a limited agreement on maritime transport with the United Kingdom. The agreement is limited to revenue from international shipping and provides that profits generated by a UK or SARS company in the territory of the other party are exempt. The provisions of the Agreement, which entered into force on 3 May 2001, applied to corporation tax in the United Kingdom from 1 April 2002 and, from 6 April 2002, to income tax and capital gains tax. It applied to the RAD from 1 April 2002. This document contains the following information: agreement between the United Kingdom and Hong Kong for the avoidance of double taxation. The agreement applies to the United Kingdom from 1 April 2011 for corporation tax and, from 6 April 2011, to income tax and capital gains tax.
It shall apply to Hong Kong from 1 April 2011. Under the Convention, Switzerland is exempt from double taxation. In addition, the withholding tax rate has been reduced to 10%. Those who reside doubly in the UK and another country with a DBA agreement can apply for full or partial income tax relief. These include bank interest, licence payments, most working pensions and pensions. The double taxation treaty can be complicated. People with dual domicile must ensure that the appropriate amount of tax is paid, recovered or charged in each country. In some cases, more than two countries are involved. For example, a foreigner may live as an expatriate in the UK and receive income from a third country and should be familiar with DBA law to ensure that only the correct amount of tax has been paid in the relevant country. The Agreement for the Avoidance of Double Taxation of Income and the Prevention of Tax Evasion broadens the scope of the original Agreement on Business Profits and Income from Personal Services, which both parties signed in 1998. The agreement will apply to Hong Kong from 1 April 2011 and to the UK: in some cases it is possible that the person may claim tax breaks, but how you benefit from a facility depends on the UK`s DBA agreement with the country where your income comes from. The situation becomes more complicated when tax rates vary from country to country.
What will happen then? To further understand the double taxation convention, we gave a typical example: in November 2010, the Hong Kong/Luxembourg DBA was updated to include the article on information exchange, so that the agreement is in line with the international standards of the Organisation for Economic Co-operation and Development. The agreement was also the first Hong Kong DBA to be signed using the Organisation for Economic Co-operation and Development standard for the exchange of tax information. China, Hong Kong and Great Britain apply the credit method to avoid double taxation. Dividends received by a company established in Hong Kong from a company established in the United Kingdom are exempt only to the extent that the conditions for exemption under United Kingdom law are met. “The conclusion of a comprehensive double taxation agreement with the mainland, as well as the agreement on a closer economic partnership between the mainland and Hong Kong, will further incentivize international investors to enter the continental market via Hong Kong. . . .