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Economy

HK, Japan reach agreement on income tax

(Xinhua)
Updated: 2010-03-31 15:24
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HONG KONG - The Government of the Hong Kong Special Administrative Region of the People's Republic of China (HKSAR) and the Government of Japan reached an agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, according to a news release by the Hong Kong Information Services Department on Wednesday.

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This agreement intends to clarify the taxation on investment income and business profits of enterprises operating in each other's places and to avoid instances of double taxation. It promotes further investment and economic exchange between Hong Kong and Japan, said the release.

This agreement also enables both tax authorities to carry out effective exchange of information regarding tax matters in accordance with the international standard, with a common objective to prevent international tax evasion and tax abuse.

According to the HKSAR government's Information Services Department, the agreement will be signed after the completion of necessary internal procedures by the respective governments. The agreement will enter into force after approval by the Legislative Council in the case of Hong Kong and approval by the Diet in the case of Japan.
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