Hong Kong and Malta today signed an agreement for the avoidance of double taxation and the prevention of income tax evasion.
The agreement was signed by Secretary for Financial Services & the Treasury Prof KC Chan and Malta's Ambassador to China Joseph Cassar.
The agreement sets out the allocation of taxing rights between the two jurisdictions and the relief of tax rates on different types of passive income, helping investors better assess their potential tax liabilities from cross-border economic activities.
The agreement will boost economic and trade ties and provide incentives for companies in both places to do business or invest.
Without the agreement, income earned by Malta residents in Hong Kong is subject to both Hong Kong and Malta income tax. Profits of Maltese companies doing business through a branch in Hong Kong are fully taxed in both places. Under the agreement, tax paid in Hong Kong will be allowed as a credit against tax payable in Malta.
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