MSAR and China sign memorandum on reduced taxation

The local government signed a new memorandum with the mainland on the reduction of taxation on aircraft and ship leasing businesses and on tackling tax evasion on dividends, interest, royalties and capital gains.
The “Protocol on the Avoidance of Double Taxation and Prevention of Evasion of Income Tax” was signed in Beijing.
The Secretary for Economy and Finance, Lionel Leong, and the deputy administrator of the State Administration of Taxation, Wang Qinfeng, signed the document on behalf of the MSAR and the Central Government, respectively.
The Government Information Bureau said in a statement that the memorandum includes a reduction in the withholding tax on lease rentals in aircraft and ship leasing businesses (which are treated as royalties) from 7 percent to 5 percent; and enhancements to measures for tackling tax evasion on dividends, interest, royalties and capital gains.
Leong indicated that the new protocol on tax would improve the fairness of the taxation system as applied to residents of the region and of the mainland, as well as creating a better business environment and enhancing transparency in order to tackle tax evasion.
The arrangement was first signed in 2003 with subsequent revisions in 2009 and 2011.