Hong Kong and Switzerland have signed a double taxation agreement (DTA) that clearly sets out the allocation of taxing rights between the two jurisdictions and the relief on tax rates on different types of passive income, reports Tax-News.com.
The DTA is expected to help investors better assess their potential tax liabilities from cross-border economic activities, foster closer economic and trade links between the two places, and provide added incentives for companies in Switzerland to do business or invest in Hong Kong, and vice versa.
Hong Kong airlines operating flights to Switzerland will be taxed at Hong Kong's corporation tax rate. Profits from international shipping transport earned by Hong Kong residents that arise in Switzerland, which are currently subject to tax there, will enjoy tax exemption under the agreement, says Tax-News.com.
The Hong Kong/Switzerland DTA also incorporates the latest Organization for Economic Cooperation and Development standard on exchange of tax information.
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