Guernsey has signed a Double Taxation Agreement (DTA) with Hong Kong, meaning that Guernsey has now signed full DTAs with seven jurisdictions.
In addition to the DTA with Hong Kong, Guernsey has had a DTA with the UK for many years and has signed DTAs with Malta, in 2012, and earlier this year with the Isle of Man, Jersey, Qatar and Singapore.
The DTA was signed for Guernsey by Peter Harwood, chief minister, who commented that this was an important step in growing the business links between Guernsey and the Far East.
Harwood said: “I am delighted to further strengthen our relationship with Hong Kong. The signing of this DTA, combined with the visit of the Chinese Ambassador to the UK to Guernsey this week, recognises the importance attached to Guernsey’s business relationship with the Far East.”
“The agreement is expected to bring significant commercial benefits to our finance sector, resolving issues relating to potential double taxation, and leading to greater opportunities for new business.”
In 2011, Guernsey businesses were approved to list on the Hong Kong stock exchange. And today a number of Guernsey-based firms have offices in Hong Kong, including law firms Mourant Ozannes and Ogier, fund administrator International Adminstration Group and fiduciary services providers Louvre, Nerine and Newhaven.
Fiona Le Poidevin, chief executive of Guernsey Finance, said: “The DTA means that individuals or companies with ‘home’ as one jurisdiction but with interests in the other jurisdiction will have mechanisms in place to prevent then from being taxed by both sets of authorities on the same income.”
“This clarity and certainty on matters of taxation makes it more attractive to conduct business between the two jurisdictions, especially in terms of investment funds, fiduciary services and intellectual property.”
Rob Gray, Guernsey’s director of income tax, said: “As well as creating a mechanism for exchanging requested tax information with Hong Kong, the agreement will assist in resolving issues relating to potential double taxation of both corporate and personal incomes, such as business profits, dividends, interest, royalties, income from employment and pensions.”
Guernsey has also now signed 41 Tax Information Exchange Agreements (TIEAs), most recently with the British Virgin Islands last week.
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