布政司署
香港下亞厘畢道
RESTRICTED
106/1
GOVERNMENT SECRETARIAT
LOWER ALBERT ROAD
HONG KONG
*** OUR REF.: PA CR 6/1476/86
* YOUR REF.: HKC 106/1
DJ Barton, Esq.,
Hong Kong Department FCO
Dear David,
DIEU
ET MON
30 April 1987
+
Double Taxation
Thank you for your letter of 13 March. I have sought the advice of those concerned.
Existing policy is that Hong Kong does not enter into double taxation agreements. This is partly because of the territorial source limitations inherent in Hong Kong's taxation system, for which reason there is no real need or justification for Hong Kong to enter into double taxation agreements with other tax jurisdictions, nor for Hong Kong to be aligned to those concluded by the UK.
Those concerned here would also be reluctant to see the 1960 UK-Italy Double Taxation Agreement extended to Hong Kong because if it were, under Article VI of that agreement, the HKG would forego the revenue that is currently being collected from Italian airline and shipping companies under section 23C of the Inland Revenue Ordinance.
I am sorry not to be more helpful.
For your own information, the HKG is currently conducting a review of policy in this area. At this stage, I cannot predict whether there is likely to be any change. Should the policy be changed at some stage, and the 1960 Agreement be extended to Hong Kong, and if its substance were intended to continue to apply after 1997, we believe that it would in any case fall within the scope of the guidelines of the JLG IRO Sub-group for consultation. We would therefore need to consult the Chinese authorities. But for the present this does not of course arise.
c.c.
Your ever,
Chris
(C ↑ Wood)
Assistant Polical Adviser I
DFS (Attn: Mr I Wotherspoon)
S (GD)
LO (SD)
CIR
(Attn: Mr N Chan)
(Attn: Mr A To)
(Attn: Mr A Au-yeung)
REST