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The Government of the Hong Kong Special Administrative Region of the People’s Republic of China and the Government of the Republic of Mauritius, desiring to further develop their economic relationship and to enhance their co-operation in tax matters, signed a Comprehensive Double Taxation Agreement (CDTA) on 7th November 2022.
This CDTA is the 46th agreement that Hong Kong has concluded. It sets out the allocation of taxing rights between the two jurisdictions and will help investors better assess their potential tax liabilities from cross-border economic activities, thereby promoting economic and trade connections between Hong Kong and Mauritius.
Avoidance of double taxation
Where the income of a Hong Kong resident is subject to tax in both the jurisdictions, the Hong Kong resident can credit the tax paid in Mauritius on the relevant income against the Hong Kong tax liability arising on the same income. The available tax credit is, however, limited to the Hong Kong tax levied on the same income.
Encouraging trade and investment Â
The CDTA clearly establishes a division of taxation rights between Hong Kong and Mauritius, helping investors to better assess potential tax liability for cross-border transactions. In addition, to facilitate trade and investment, the CDTA also include provisions to reduce or eliminate applicable taxes on certain sources of income between the two jurisdictions.
Prevention of treaty abuse
The CDTA contains the following specific provisions against treaty abuse:
Effective date of the CDTA
The CDTA will only come into force in the tax year following the calendar year in which the relevant ratification procedures are completed. If the ratification procedures can be completed in 2022, the CDTA shall then have effect as follows:
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Copyright © Chandrawat & Partners. All Rights Reserved.
Chandrawat & Partners stands as a dynamic and rapidly expanding full-service firm, specializing in the delivery of exceptional professional and corporate services to a diverse clientele, both foreign and local. We proudly represent companies and individuals across a wide spectrum of sectors through distinct entities established in various countries worldwide.
Chandrawat & Partners stands as a dynamic and rapidly expanding full-service firm, specializing in the delivery of exceptional professional and corporate services to a diverse clientele, both foreign and local. We proudly represent companies and individuals across a wide spectrum of sectors through distinct entities established in various countries worldwide.
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