Hong Kong Tax Alert: 6 May 2013

Hong Kong signs comprehensive double tax agreement with Guernsey

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On 23 April 2013, Hong Kong signed a comprehensive double taxation agreement (CDTA) with Guernsey. This brings the number of CDTAs Hong Kong has concluded with other jurisdictions to twenty-eight.

The CDTA with Guernsey contains several favorable provisions, which are expected to boost closer economic and trade ties between Hong Kong and Guernsey.  This alert summarizes the salient points of those provisions as applicable to Hong Kong residents. 

Who is covered by the CDTA

The CDTA only applies to persons who are residents of either Hong Kong or Guernsey. In this regard, a company that is incorporated or constituted under the laws of Hong Kong automatically qualifies as a Hong Kong resident. For a company which is not so incorporated or constituted, it would be regarded as a Hong Kong resident only if it is "normally managed or controlled" in Hong Kong, a residence test commonly used in other CDTAs Hong Kong has concluded.