Hong Kong and Malaysia signed the tax agreement

25.04.2012

Today, on April 25, 2012, the Governments of Hong Kong and Malaysia signed the agreement on double taxation avoidance which also provides an exchange of tax information on OECD standards and by that turned this day into historical date for investors of these states.

The new agreement will allow to avoid double taxation to investors who have operating representations in these jurisdictions. Moreover, the residents of Hong Kong receiving the percentage income of residents of Malaysia, will pay withholding tax on a rate of 10 %, instead of 15 %. Concerning a paid royalty, the withholding tax will be lowered from 10 % to 8 %.

Let's notice, for Hong Kong it became already the 24th similar agreement signed with foreign trading partners. 

Expert’s opinion

«As we already noticed, Hong Kong isn't «tax harbor», nevertheless, thanks to operating taxation system by a territorial principle this administrative region of China is one of financial centers of the world. Undoubtedly, signing of this tax agreement with Malaysia only will strengthen current situation and will add attraction to the country.»

On the basis: www.ird.gov.hk

Andrianova Irina ( the leading lawyer of legal support and banking consulting department of Honest & Bright )