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Advantages for Canadian companies under CDTA (with photo)

     The comprehensive avoidance of double taxation agreement (CDTA), which was signed between the governments of Hong Kong Special Administrative Region (HKSAR) and Canada last year, would help reduce tax burden and the costs for business and investment between the two places, according to the Director of the Hong Kong Economic and Trade Office in Toronto (HKETO), Miss Gloria Lo.

     Further to the promotion in West Canada in late September, HKETO today (October 2, Toronto time) in conjunction with the Hong Kong Trade Development Council (HKTDC) encouraged local business community to leverage on the advantages of Hong Kong in venturing into Asia at a business networking morning workshop organised by the Hong Kong-Canada Business Association (HKCBA) (Toronto GTA Section) in the City of Markham.

     Miss Lo briefed the local business community on the potential in the traditional pillar industries as well as a number of new growth areas such as innovation and technology, environmental industry, culture and creativity, etc. She also emphasised the advantages of doing business in Hong Kong with its simple and low tax rates, among others. The CDTA signed between the HKSAR and Canada is an incentive to benefit both places.

     "CDTA ensures that investors will not pay tax twice on a single source of income. In simple terms, the agreement will bring tax savings and a higher degree of certainty on taxation liabilities for Canadian investors when they engage in trade and investment activities with Hong Kong. It is hopeful that the agreement would come into operation in 2014 after the completion of relevant procedures," said Miss Lo.

     Under the agreement, tax paid in Hong Kong will be allowed as a credit against tax payable in Canada. Any tax paid in Canada by the companies will also be allowed as a credit against the tax payable in Hong Kong in respect of the income, subject to the provisions of the tax laws of Hong Kong. Furthermore, the Canadian withholding tax on royalties, interest and dividends will be reduced.

     As the CDTA sets out clearly the allocation of taxing rights between the two jurisdictions and the relief on tax rates on different types of passive income, it will help investors better assess their potential tax liabilities from cross-border economic activities.

     "The agreement will provide added incentives for Canadian companies to invest in Hong Kong and vice versa and help strengthen the economic and trade ties between the two places," Miss Lo said.

     To help Canadian business people capitalise on the window of opportunities in Hong Kong, the HKTDC encouraged local business community to participate in the upcoming Hong Kong Forum, the SME Expo and the Business for IP Asia Forum to be held in December this year, and the Asia Financial Forum in January 2014.  These annual major events provide Canadian companies a great platform for market intelligence, networking and generation of new business.

     HKETO also recommended local companies to make use of the services available at the Invest Hong Kong (InvestHK) unit in Toronto.  InvestHK is a government department under the Commerce and Economic Development Bureau in the HKSAR Government. It helps companies to succeed and minimise risk to find business opportunities in Mainland China and across Asia through Hong Kong. It partners with clients on a long term basis and is available to help at any stage of their business development. The office provides customised and confidential services, throughout the stages of planning, set up, launch and expansion.

     "InvestHK holds the hands of interested companies in the process of establishing presence and expanding in Hong Kong. Its services are free of charge," Miss Lo added.

Ends/Thursday, October 3, 2013
Issued at HKT 09:00


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