Hong Kong today signed a comprehensive avoidance of double taxation agreement (CDTA) with the Maldives, on the margins of the 8th High-level meeting of the Asia Initiative hosted by the Maldives.

Commissioner of Inland Revenue Benjamin Chan signed the CDTA on behalf of the Hong Kong Special Administrative Region Government with representative of the Maldives Government, Commissioner General of Taxation of the Inland Revenue Authority Hassan Zareer.

The CDTA sets out the allocation of taxing rights between Hong Kong and the Maldives, which will help investors better assess their potential tax liabilities from cross-border economic activities.

Secretary for Financial Services & the Treasury Christopher Hui said the Maldives is a participant in the Belt & Road Initiative, and this CDTA, which is the 52nd that Hong Kong has concluded, signifies the ongoing achievements of the Hong Kong SAR Government in expanding the city’s CDTA network, in particular with tax jurisdictions participating in the Belt-Road initiative.

“I have every confidence that this CDTA will further promote economic and trade connections between Hong Kong and the Maldives.”

In accordance with the Hong Kong-Maldives CDTA, Hong Kong companies can enjoy double taxation relief in that any tax paid in the Maldives, whether directly or by deduction, will be allowed as a credit against the tax payable in Hong Kong in respect of the same income under the tax laws of Hong Kong.

The agreement also provides tax relief arrangements.

It will come into force after completion of ratification procedures by both jurisdictions. In Hong Kong, the Chief Executive-in-Council will make an order under the Inland Revenue Ordinance, which will be tabled at the Legislative Council for negative vetting.