On 19 July 2019, Hong Kong and China signed the fifth protocol to the arrangement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income with the commissioner of the state taxation administration.

On 19 July 2019, the Hong Kong’s Financial Secretary, Mr Paul Chan and China’s Commissioner of the State Taxation Administration, Mr Wang Jun, signed the fifth protocol to the arrangement between the mainland of China and the Hong Kong special administrative region for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.

The Fifth Protocol adds a new teachers and researchers article to the Arrangement. With this new article, a qualified teacher or researcher, who is employed in Hong Kong or the Mainland and engages in teaching and research activities on the other side, shall be exempt from taxation on that other side for a period of three years, provided that the relevant income has been subject to tax on the side where the person concerned is employed.
 

In addition, the Fifth Protocol incorporates into the Arrangement measures to prevent tax treaty abuse, which form part of the Base Erosion and Profit Shifting package promulgated by the Organisation for Economic Co-operation and Development in October 2015, to ensure that the Arrangement follows the latest international standard.
 
The Fifth Protocol will come into force after the completion of ratification procedures and notification by both sides. In the case of Hong Kong, after an order is made by the Chief Executive in Council under the Inland Revenue Ordinance for the Fifth Protocol, the order will be presented to the Legislative Council for negative vetting.