On Friday, Pakistan and Hong Kong signed an agreement over income tax. The core purpose of the agreement is to avoid double taxation and prevent fiscal evasion regarding income tax.
The ceremony was held at the Central Government Offices where both the country’s government officials inked the agreement. Secretary for Financial Services and the Treasury, Professor K. C. Chan signed as representative of the Hong Kong Special Administrative Region whereas Masood Khalid, Pakistan’s Ambassador to China signed the agreement as representative of the home side.
Officials of the Pakistan’s missions in Hong Kong and China including, Qadir Memon and Ali Ahmed Arain, Pakistan’s Consul General for Hong Kong and Guangzhou, China also attended the meeting. They were also the key witnesses of the signing ceremony.
Competencies of the Agreement
Once the agreement is executed, it will protect the citizens and companies of both the countries against double income taxation.
According to the agreement, Hong Kong’s Pakistani companies would be safe from double taxation. Moreover, they will also be allowed a credit on same profit against tax in Hong Kong according to the tax laws of Hong Kong. Similarly, Pakistani companies would be allowed deduction form same income tax in Pakistan for the tax they pay in Hong Kong.
The agreement will be executed under the rules of tax collection relevant to business transactions in neighboring country, profits, interest and sovereignties.
Contribution to the Economies
Ambassador Masood Khalid convinced the meeting that the agreement will help endorse the respective economies of Pakistan and Hong Kong. He added that it will also strengthen the developing mutual economic relations between both countries.
He further stated that it will bring along the economies of both the countries closer to the Belt and Road initiative.
Masood Khalid said that the agreement provides taxation rights between both the countries. Eventually it will help investors to keep track of their tax liabilities from cross-border economic activities and evaluate efficiently.
Abdul Qadir Memon, Consul General for Hong Kong said that Pakistan has achieved a great milestone signing the agreement with the world’s cheapest economy, Hong Kong.
The counsel general said that eventually it will help develop confidence in the economy of Pakistan.
Source: Dunya News