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France, Hong Kong sign taxation agreement

21 October 2010 18:26 (UTC +04:00)

Baku-APA. Financial Secretary John Tsang of the Hong Kong Special Administrative Region of China and French Minister of Finance Christian Lagarde signed an agreement here Thursday morning to prevent double taxation and tax evasion, APA reports quoting Xinhua News Agency.

The Avoidance of Double Taxation Agreement (DTA) would give France necessary information in application of its tax legislation and showed Hong Kong’s decision to exchange information on tax matters, the French ministry said in a statement.

Under the agreement, double taxation can be avoided in both regions and Hong Kong people will benefit from a lower withholding tax of 10 percent, while French residents in Hong Kong can enjoy a reduced tax rate of between 18 and 10 percent.

According to Hong Kong Economic and Trade Office in Europe, Hong Kong residents who has passive incomes in France are currently subject to a withholding tax rate as high as 33.33 percent in France.

After signing the agreement, Tsang said Hong Kong’s relations with France had been raised to a new level.

This was the 15th convention for the avoidance of double taxation concluded by Hong Kong with its trading partners, following similar agreements with Belgium, Thailand, Luxembourg, Vietnam, Brunei, the Netherlands, Indonesia, Hungary, Kuwait, Austria, the United States, Ireland, Liechtenstein and the Chinese mainland, the Hong Kong Trade Office said.