ISLAMABAD, (MILLAT/APP): Pakistan and Hong Kong Friday
signed the pact on avoidance of double taxation and prevention of
fiscal evasion with respect to taxes on income.
Pakistan’s Ambassador to China Masood Khalid signed the
agreement while the Secretary for Financial Services and the
Treasury, Professor K. C. Chan signed on behalf of the government of
the Hong Kong Special Administrative Region, at a ceremony held at
the Central Government Offices in Hong Kong, a press release received here said.
Pakistan’s Consul General for Hong Kong and Guangzhou, China
Abdul Qadir Memon and Ali Ahmed Arain, respectively witnessed the
signing ceremony along with other officials of the Pakistan’s
missions in Hong Kong and China.
The agreement once ratified, shall benefit individuals and
companies working in Pakistan and Hong Kong SAR by providing
safeguards against paying double taxation on the incomes of the
residents of both jurisdictions.
Under the agreement, double taxation will be avoided in any
Pakistani tax paid by Hong Kong companies and will be allowed as a
credit against the tax payable in Hong Kong on the same profits,
subject to the provisions of the tax laws of Hong Kong.
Likewise, for Pakistani companies, the tax they paid in Hong
Kong will be allowed as a deduction from the tax payable on the same
income in Pakistan.
The agreement will also provide adequate certainty in respect
of taxation rules applicable to cross-border business transactions,
dividends, interest and royalties etc.
On this occasion, Ambassador Masood Khalid said the agreement
would promote economic cooperation, investment and would strengthen
the existing bilateral economic relations between Pakistan and Hong
Kong.
He termed it a step forward bringing economies along the Belt
and Road initiative closer.
The ambassador said the agreement set out clearly the
allocation of taxing rights between the two jurisdictions which
would eventually help investors better assess their potential tax
liabilities from cross-border economic activities.
Consul General for Hong Kong Abdul Qadir Memon said for
Pakistan, this was a great milestone to sign the agreement with Hong
Kong, the world’s freest economy.
This would in-turn help confidence building in Pakistan’s
economy, the consul general stated.