* DTA Between Hong Kong And Belgium Enters Into Force
The Hong Kong government announced last week that an agreement on the avoidance of double taxation (DTA) between the Special Administrative Region and Belgium has now entered into force, meaning that residents of either country can now claim tax relief or tax savings on income derived from each other's territory from businesses, employment or investment.
The agreement was signed by representatives of the two governments in December 2003, but according to the Hong Kong authorities, notification was not received from the Belgian government regarding the completion of the legislative process there until earlier this month.
Announcing the entry into force of the DTA, Commissioner of Inland Revenue of the Hong Kong government, Lau Mak Yee-ming revealed last week that the agreement will apply in Hong Kong for any year of assessment beginning on or after April 1, 2004 and in Belgium in respect of taxes charged on or after Jan. 1, 2004.
"The agreement seeks to eliminate double taxation instances encountered by Hong Kong and Belgian investors through the allocation of taxing rights and the provision of tax relief. It also formalizes the tax relief being offered by the two tax authorities unilaterally at present, thereby providing a further level of certainty and stability to potential investors. In some instances, taxes are reduced. This will bring about tax savings as well as promote the flow of investment between the two places," she explained, continuing:
"This agreement is the first of its kind. It represents an important milestone in Hong Kong's own program of comprehensive double taxation agreements. Hong Kong has concluded a double taxation arrangement with the mainland in 1998 that deals with business income, income from personal services and transportation income. On the international traffic side, which is more susceptible to double taxation, Hong Kong has concluded 18 double taxation avoidance arrangements on airline income, five agreements on shipping income and two agreements on airline and shipping income."
