In June 2001, Hong Kong concluded a limited agreement on maritime transport with the United Kingdom. The agreement is limited to revenue from international shipping and provides that profits generated by a UK or SARS company in the territory of the other party are exempt. The provisions of the Agreement, which entered into force on 3 May 2001, applied to corporation tax in the United Kingdom from 1 April 2002 and, from 6 April 2002, to income tax and capital gains tax. It applied to the RAD from 1 April 2002. In early 2008, Hong Kong and the mainland signed the Second Protocol on the Prevention of Double Taxation and the Prevention of Income Tax Evasion. There are also special provisions for maritime and air transport, with profits from the operation of ships or aircraft in international traffic, including rental income and container rentals, taxable only in the owner`s country. The Fifth Protocol also revises the definition of agency in the permanent establishment (PE) article to include persons who « ordinarily play the primary role leading to the conclusion of contracts that are normally entered into without substantial modification by the enterprise, » thus broadening the definition beyond situations in which a person « ordinarily enters into contracts, » as was the previous definition. Among the aforementioned contracts are: « Many places in the region have already set up a network of CDTAs. Such a network for Hong Kong will put us on an equal footing with other localities in the region that already have one, thus further improving our competitiveness in attracting foreign investment, » Ma said.
For interest received by a Hong Kong resident (if the interest is collected in Thailand and is not attributable to a permanent establishment), the current withholding tax in Thailand is 15% of the gross amount. Under the agreement, Thai withholding can be reduced to 10% if interest is paid to a financial institution or insurance company or if interest is paid on debts resulting from the sale of equipment, goods or services. In addition to the prevention of double taxation, the Convention provides for the exchange of information between the two tax authorities in order to tax evasion, profit shifting and soil erosion. Under the agreement, profits transferred from a Thai branch to its headquarters in Hong Kong are exempt from the 10% withholding tax in Thailand. Comprehensive double taxation treaties have been concluded between Hong Kong and the following countries (with « in force » dates): the agreement also plays a role in protecting the public treasury by providing for provisions to combat tax evasion and evasion, in part through measures providing for the exchange of information between tax authorities. All recent UK double taxation treaties largely follow the approach taken in the Organisation for Economic Co-operation and Development (OECD) Model Convention on Income and Capital. The agreements provided for the College continue this approach. This Agreement increases to seven the number of PDOs signed by Cambodia and contains specific provisions that cover: the legislation allows Hong Kong to conclude comprehensive DTAS that contain the Organisation for Economic Co-operation and Development (OECD) international standard for the exchange of information. Until June 2001, there were no comprehensive double taxation treaties in Hong Kong. . .