Hong Kong and Saudi Arabia have signed a comprehensive agreement for the avoidance of double taxation.
Secretary for Financial Services & the Treasury James Lau signed the deal with Saudi Consul-General Omar Bakheet Al Bunayan today.
The document sets out the allocation of taxing rights between the two jurisdictions which will help investors better assess their potential tax liabilities from cross-boundary economic activities.
It is the 38th tax agreement Hong Kong has signed with its trading partners.
Under it, any Saudi Arabian tax paid by Hong Kong companies will be allowed as a credit against the tax payable in Hong Kong on the same profits, subject to the provisions of Hong Kong tax laws.
For Saudi Arabian companies, the tax they pay in Hong Kong will be allowed as a deduction from the tax payable on the same income in Saudi Arabia.
The agreement will come into force after the completion of ratification procedures on both sides.
For Hong Kong, it will be implemented by an order to be made by the Chief Executive in Council under the Inland Revenue Ordinance, subject to Legislative Council vetting.
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