Hong Kong adopts the territorial tax base, which imposes only Hong Kong income/profits and in most cases is not taxed in Hong Kong for income from a resident of an outside source in Hong Kong. As a result, Hong Kong residents are generally not subject to double taxation. Many countries that tax their people on a global basis also offer unilateral tax breaks to their residents who operate in Hong Kong for every Hong Kong tax paid on Hong Kong`s income/profits. Hong Kong allows the deduction of foreign tax paid on the basis of turnover for income that is also taxable in Hong Kong. As a result, companies operating in Hong Kong generally have no problem with double taxation of income. Another problem is marine revenues. Hong Kong amended legislation to provide for a mutual exemption from ship revenues from 1 April 1998, to allow ship operators to benefit from tax breaks from places subject to similar mutual exemption legislation. At the same time, Hong Kong has begun negotiations on simplifying double taxation for maritime income with other places that either do not provide for mutual exemption in their legislation or even prefer reciprocal exemption provisions to prefer a bilateral agreement. All of our DTAs contain a MAP article. A Singapore tax subject who suffers from double taxation or who believes that double taxation is imminent and who believes that the taxation imposed by the competent tax authorities is not consistent with the determination of the DBA concerned may ask the IRAS to resolve the issue of double taxation under the ARTICLE of the POP. For more information on MAP. Double taxation occurs when two or more tax zones overlap, so the same income or profit elements are taxed. HKSARG welcomes your views on the general policy on double taxation and on the choice of negotiating partners.
Representations should be addressed to the following bodies: View a list of Singapore`s competent authorities (PDF, 152 KB) for international tax treaties. All DBAs include the POP as a low-cost dispute resolution mechanism. As a general rule, the POP only provides for the relevant authorities to work to resolve the problem. However, some POPs provisions are supplemented by arbitration provisions to eliminate cases where the relevant authorities are unable to reach an agreement. Because of the international nature of operations, air carriers are more vulnerable to double taxation than other tax payers. Given that DBA negotiations may take longer, Hong Kong`s policy was to include double taxation regimes for air revenues in bilateral air services agreements negotiated between Hong Kong and aviation partners. Despite this, the Government of the Hong Kong Special Administrative Region (HKSARG) recognizes that there are advantages in concluding comprehensive double taxation (DBA) agreements/conventions with our trading partners. A DBA gives investors a guarantee on the tax rights of the contracting parties; Helps investors better assess their potential tax liabilities from economic activities; and provides an additional incentive for foreign companies to do business in Hong Kong, as well as for Hong Kong companies to do business abroad. That is why HKSARG`s policy was to establish a DBA network that would minimize the double taxation of Hong Kong residents and residents.