Fifth Protocol to Arrangement for Avoidance of Double Taxation and the Prevention of Fiscal Evasion between Mainland and Hong Kong

The Fifth Protocol to the Arrangement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion between the Mainland of China and the Hong Kong Special Administrative Region was signed in July 2019. The Fifth Protocol will come into force after the completion of ratification procedures and notification by both sides.

The new article is going to provide tax relief to qualified Hong Kong and Mainland teachers and researchers working on the other side. A qualified teacher or researcher, who is employed in Hong Kong or the Mainland and engages in teaching and research activities on the other side, shall be exempt from taxation on that other side for a period of three years, provided that the relevant income has been subject to tax on the side where the person concerned is employed.

In additional, the Fifth Protocal incorporated the measure to prevent tax treaty abuse from the Base Erosion and Profit Shifting package promulgated by the Organisation for Economic Co-operation and Development in October 2015, including the amendment of preamble and certain articles, such as Article 4 Resident; Article 5 Permanent Establishment; Article 13 Capital Gain and etc.

Arrangement for Avoidance of Double Taxation and the Prevention of Fiscal Evasion between Mainland and Hong Kong (Chinese version only), please visit the website:

https://www.ird.gov.hk/chi/pdf/dta_china_new_arrangement_tc.pdf

Details of the Fifth Protocol (Chinese version only), please visit the website:

www.ird.gov.hk/chi/pdf/Fifth_Protocol_Mainland_HongKong.pdf

The above information was extracted from the press release of Hong Kong Inland Revenue Department. For more information, please visit the website:

https://www.ird.gov.hk/eng/ppr/archives/19071901.htm