Another common double taxation situation is that of a person who is not resident in the United Kingdom but who has income from the United Kingdom and who remains tax resident in his or her country of origin. The agreement will apply to Hong Kong from 1 April 2011 and to the United Kingdom: in addition, there is a double taxation agreement between Hong Kong and Saudi Arabia, which is currently pending. There is also a Memorandum of Understanding with China which says that a double taxation convention is in fact in domestic law in both countries. For example, if you are not based in the UK and you have bank interest in the UK, that income would be taxable in the UK as UK income under national law. However, if you live in France, the double taxation agreement between the United Kingdom and France stipulates that interest should only be taxable in France. This means that the UK must waive its right to tax these revenues. In this case, you would be entitled to HMRC (in practice, this would usually be done on a self-assessment return) to exempt INCOME from UK tax. Under UK regulations, he is not domiciled and, in the United Kingdom, he is taxable only on his income from the United Kingdom. Mark remains resident in Germany and is therefore taxable on his global income. The Double Taxation Convention tells Mark that the UK has the primary right to tax income and that if Germany also wants to tax it, the foreign tax credit method should be used to avoid double taxation.
The legislation allows Hong Kong to conclude comprehensive DBAs that contain the International Standards of the Organisation for Economic Co-operation and Development (OECD) for the exchange of information. Until June 2001, there were no comprehensive double taxation agreements in Hong Kong. Since then, the number of contracts has changed quite rapidly. That`s why we offer a first free consultation with a qualified accountant that will give you answers to your questions and help you understand if a double taxation agreement could apply to you and help you save huge amounts of unnecessary taxes. For the purposes of this article, we consider that a person is tax resident in the United Kingdom and resident of an additional country, although double taxation agreements may exist between two countries. Under Article 151 of the Basic Law, Hong Kong is free to negotiate its own double taxation conventions independently of mainland China (i.e..dem the rest of the People`s Republic of China), using the acronym Hong Kong, China. The territory cannot resort to double taxation agreements that China can enter into, as these treaties only mention taxes on the continent. Mainland China will also not impose double taxation conventions on the territory, since under Articles 106 to 108 of Hong Kong`s Basic Law, it guaranteed the right to maintain an independent tax system without continental interference until 2047. You will probably need to seek professional advice if you are in a double taxation situation. We`ll tell you how to find an advisor on our “Get help” page. In June 2001, Hong Kong concluded a limited maritime traffic agreement with the United Kingdom. The agreement is limited to revenues from international maritime traffic and provides that profits made by a UK company or SAR as a result of such transactions are exempt from the territory of the other party.