Hong Kong, Indonesia Ink Tax Agreement

Hong Kong and Indonesia have signed a comprehensive double taxation agreement (DTA) that will eliminate double taxation instances encountered by Hong Kong and Indonesian investors, and bring about tax savings and certainty in tax liabilities in connection with cross-border economic activities, says Tax-News.com.

 

The tax news portal says that under the present regulations profits of Indonesian companies doing business through a permanent establishment in Hong Kong are fully taxed in both places. Under the DTA, any Hong Kong tax paid by Indonesian companies shall be allowed as a deduction from the tax payable in respect of the same income in Indonesia.

 

The DTA also includes the prevailing international standard on exchange of tax information imposed by the Organisation for Economic Co-operation and Development.

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