It was reported on 6 April 2012 that the governments of Japan and Hong Kong have exchanged notes and the double taxation agreement (DTA) between the two countries entered into force on April 1, 2012.
Hong Kong signed the DTA with Japan on November 9, 2010. It sets out the allocation of taxing rights between the two jurisdictions and the relief on tax rates on different types of passive income.
Under the agreement, double taxation will be avoided in that any Japanese tax paid by the companies will 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.
