India signed a double taxation avoidance agreement (DTAA) with Hong Kong Special Administrative Region (HKSAR) on March 19, 2018 to improve transparency in tax matters and help curb tax evasion and avoidance.
The agreement was signed by Indian Ambassador to China Gautam Bambawale and Hong Kong Finance Secretary Paul Chan Mo-po in Hong Kong.
• The treaty on the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income will stimulate flow of investment, technology and personnel from India to HKSAR and vice versa.
• It will prevent double taxation and boost exchange of information between the two contracting parties.
• It will also improve transparency in tax matters and will help curb tax evasion and tax avoidance.
• The agreement was signed during Indian Ambassador Gautam Bambawale’s first-ever visit to Hong Kong, a special administrative region of China, after he took over as the Ambassador to China in 2017.
• During the visit, Bambawale met Hong Kong’s Chief Executive Carrie Lam Cheng Yuet-ngor and other senior officials and spoke on India-China relations at an event hosted by the Hong Kong Centre of Asia Society.
• Hong Kong, one of the most significant global financial centres, is a leading economic hub of Asia.
• The region holds the highest Financial Development Index score and has been consistently been ranked as the most competitive and freest economic area in the world.
Hong Kong: History
• The special administrative region was formerly a colony of the British Empire after it was surrendered by Qing dynasty of China at the conclusion of the first Opium War in 1982.
• Except for World War II, when it was occupied by Japan, the region remained under British control till 1997, when it was returned to China.
• Though it is a part of China, the region maintains a separate political and economic system apart from mainland China.
• The region has its own currency, political system and laws and its leader is called the Chief Executive.