Archived webcast - Hong Kong tax treaty update 

12 May 2010 (Wednesday)
  
One of the drawbacks of Hong Kong as an investment platform and regional headquarter location has historically been its lack of a network of comprehensive double tax treaty agreements ("CDTA").  In recent years with the execution of CDTAs with EU member countries Belgium and Luxembourg and countries in the region China, Thailand and Vietnam, this had begun to change.
   
The difficulty Hong Kong historically had in convincing potential treaty partners to conclude treaties was the "what's in it for us" perception.  Given its sourced based system of taxation and lack of dividend and interest withholding taxes, exchange of information was one bargaining chip that Hong Kong had.  The existing rules in Hong Kong tax law however, limited the ability of the Inland Revenue to obtain and exchange information.  Changes in the law which took effect on 12 March 2010 effectively mean that the Inland Revenue Department is now able to obtain information necessary to enable it to enter into CDTA that include the 2004 OECD Exchange of Information Article.
   
It did not take long and in the subsequent weeks CDTAs were signed with the Netherlands, Indonesia and Brunei.  It was also announced that CDTAs had been concluded with a further five countries: Austria, France, Hungary, Ireland, and Liechtenstein.  The business community was then further surprised when the IRD released a press release stating that it had agreed in principle a CDTA with Japan.

What we covered

• an update on the current status of Hong Kong's tax treaty network;
• what to expect in the future;
• what opportunities does this create;
• "Beneficial ownership and substance requirements" - what do these mean and what have we observed on the international stage / what is the OECD guidance; and
• discussion on the procedures for information exchange under the CDTAs.

Archived webcast
   
This is a 1 hour webcast including a Q&A session.
  
Webcast link:
http://www.thomson-webcast.net/cn/dispatching/?event_id=c828037d3048384ef30273d85725c287&portal_id=274ef8bd8dba7e9502353ac94067c21d

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