Prime Minister Stephen Harper and the Chief Executive of the Hong Kong Special Administrative Region, Leung Chun-ying, today witnessed the signing of a new tax treaty that will increase trade and investment between the two economies.
"Our Government is committed to reducing impediments to commerce with our valued commercial partners," said Prime Minister Harper. "The new treaty being announced today will reduce tax barriers between Canada and Hong Kong. This will increase trade and investment flows while reducing incidents of double taxation and tax evasion."
The newly signed treaty, which is based on the Model Tax Convention on Income and on Capital developed by the Organisation for Economic Co-operation and Development, will remove tax barriers to encourage trade and investment between Canada and Hong Kong. In particular, it will reduce the rates of withholding taxes that apply on certain cross-border payments and ensure that double taxation does not arise for individuals and companies doing business or earning income in the other jurisdiction.
The treaty will enter into force once it has been ratified by Canada and Hong Kong.
Canada currently has tax treaties in force with 90 countries. This treaty with Hong Kong reflects the efforts of the Government of Canada to expand its tax treaty network.