TP Week International Tax Review
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Canada-Hong Kong DTA analysis

20 November 2012

Matthew Gilleard - ITR


The long-awaited and much-lobbied-for tax treaty between Canada and Hong Kong was signed on November 11 and should facilitate investment between the two countries.

Hong Kong has rapidly been expanding its network of tax treaties, particularly with its main trading and investment partners, and the main motivation for signing this treaty appears to be the improvement of Canadian trade relations.

“Many Canadian businesses, including the Investment Industry Association of Canada, had lobbied extensively for a treaty with Hong Kong,” said Brandon Siegal, of McCarthy Tetrault, who noted that despite it being a lower tax jurisdiction, the OECD does not consider Hong Kong a tax haven and that other G8 countries such as France, the UK and Japan have negotiated similar treaties in the past few years.

“For Canada, having good trade relations with Hong Kong is especially important as Canada’s second largest trading partner is China and the Hong Kong Special Administrative Region is seen as the gateway to Chinese trade,” added Siegal. “Notably, [Canadian] Prime Minister Harper travelled to Hong Kong to witness...



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