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Seminar discusses benefits of Hong Kong tax agreement
Participants in a seminar in Ho Chi Minh City Wednesday praised a tax agreement between Vietnam and Hong Kong as beneficial to businesses in both economies.
The Hong Kong Economic & Trade Office (HKETO) in Singapore organized the seeming to discuss the Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to Taxes on Income Agreement with the Vietnamese and Hong Kong business communities.
“The double taxation agreement would benefit Hong Kong companies doing business in Vietnam and its residents working in Vietnam who will also enjoy tax savings,” Alice Lau, Hong Kong Commissioner of Inland Revenue said.
The agreement, which was signed on December 16, 2008, provides preferential tax treatments enabling businesses and individuals to better asses their investment positions and boost closer trade links between Vietnam and Hong Kong.
According to HKETO, the island has a territorial-based tax system, under which only earnings sourced in Hong Kong are taxable.
In addition, Hong Kong does not levy any withholding taxes on passive income such as dividends and interest.
However, after the agreement comes into full force, which is expected by January 1, 2010, the Vietnam tax could be allowed as a credit or deducted against the Hong Kong tax payable in respect of the same income, Lau said.
Profits from global shipping firms earned by Hong Kong residents that arise in Vietnam will also enjoy full tax exemption after the agreement becomes effective, she said.
Vinh Bao
thanhnien
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