XN000022-1991-10-17 — Page 29

THURSDAY, OCTOBER 17, 1991

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ONE FINAL NEGATIVE ASPECT, HE SAID, WAS THE POSSIBILITY THAT TAXATION EXEMPTION OR REDUCTION GRANTED TO A FOREIGN INVESTOR MIGHT END UP ONLY BEING OF BENEFIT TO THE INVESTOR'S HOME COUNTRY.

HE SAID THIS SITUATION COULD ARISE WHERE

SAVING THE TAX PROVIDED BY AN INCENTIVE WAS SIMPLY MATCHED BY A REDUCTION IN THE TAX CREDIT ALLOWED BY THE HOME COUNTRY IN RESPECT OF THE FOREIGN INCOME.

IN

THE

COULD BE OVERCOME BY A TAX SPARING CLAUSE PROBLEM APPLICABLE DOUBLE TREATY IF ONE HAD BEEN NEGOTIATED.

AN

-

"YOU WILL APPRECIATE, HOWEVER, THAT THIS POSSIBILITY IS

IN RELEVANT

HONG KONG TODAY

WE HAVE NO SUCH TREATIES, THE COMMISSIONER SAID.

HARDLY

**

HE

SPELLED OUT A NUMBER OF ATTRACTIVE FEATURES ALSO KONG'S TAX REGIME WHICH WOULD ATTRACT INVESTMENTS.

OF

HƠNG

THEY WERE: SIMPLICITY AND NEUTRALITY OF TAX LAW, CONSISTENCY IN TAXATION POLICIES, LOW RATES OF TAXATION, INCOME

A TAXED ON TERRITORIAL SOURCE BASIS, NO DISTINCTION BETWEEN RESIDENTS AND NON-- RESIDENTS, DIVIDENDS NOT SUBJECT TO TAXATION, NO INTEREST TAX AND RESTRICTED TAX ON FRINGE BENEFITS.

PROHIBITION ON TRADE IN PRISON-MADE GOODS REMINDER

A TRADE DEPARTMENT SPOKESMAN TODAY (THURSDAY) REMINDED HONG KONG COMPANIES THAT TRADE IN PRISON-MADR GOODS IS PROHIBITED UNDER BOTH CHINESE AND U.S. REGULATIONS AND THAT SUCH TRADE IS LIABLE TO BE DETAINED OR CONFISCATED BY THE RELEVANT AUTHORITIES.

"THE U.S. CUSTOMS HAS RECENTLY ANNOUNCED ITS DECISION TO HOLD UP SHIPMENTS OF CERTAIN WRENCHES AND STEEL PIPES IMPORTED FROM CHINA SUSPECTED TO HAVE BEEN PRODUCED BY PRISON LABOUR.

"ACCORDING TO THE U.S. CUSTOMS NEWS RELEASE, IMPORTATION OF PRISON-MADE GOODS INTO THE U.S. IS IN VIOLATION OF U.S. FEDERAL LAW.

"THE CHINESE GOVERNMENT HAS ALSO MADE KNOWN THAT IT IS NOT THE GOVERNMENT'S POLICY TO ALLOW EXPORT OF PRISON-MADE GOODS AND THAT VIOLATION MAY BE PENALISED ACCORDINGLY," HE SAID.

THE SPOKESMAN ADDED THAT THE TRADE DEPARTMENT WOULD ISSUB A COMMERCIAL INFORMATION CIRCULAR TO DRAW THE ABOVE TO THE ATTENTION OF THE TRADING COMMUNITY.

"HONG KONG COMPANIES MUST CONFORM TO THE LAW AND REGULATIONS OF OUR TRADING PARTNERS WHEN DOING BUSINESS WITH THEM, HE STRESSED.

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