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The Chief Executive in Council made an order under the Inland Revenue Ordinance on May 9 to give effect to the double taxation relief provision in an air services arrangement which Hong Kong recently signed with the Mainland.

HKSAR Government signed the Air Services Arrangement with the General Administration of Civil Aviation of China on February 2. The Arrangement contains a provision on double taxation relief in respect of airline income.

"The double taxation relief provisions stipulate that Hong Kong and the Mainland will provide reciprocal tax exemption for income profits and property of airlines of the other side which are derived from operating aircraft in their own area. This is mutually beneficial to the airline businesses of both Hong Kong and the Mainland," a Government spokesman said today (May 17).

"It is our policy to include provisions on double taxation relief for airline income into air services agreements negotiated between Hong Kong and our bilateral aviation partners," the spokesman explained.

The order will be gazetted on May 19 and tabled in the Legislative Council on May 24.

End/Wednesday, May 17, 2000

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