On 7 November 2022, the Secretary for Financial Services and the Treasury, Mr Christopher Hui, on behalf of the Hong Kong Special Administrative Region Government, signed a comprehensive avoidance of double taxation agreement (CDTA) with Mauritius.
This CDTA is the 46th agreement that Hong Kong has concluded. It sets out the allocation of taxing rights between the two jurisdictions and will help investors better assess their potential tax liabilities from cross-border economic activities, thereby promoting economic and trade connections between Hong Kong and Mauritius.
Under the Hong Kong-Mauritius CDTA, double taxation will be avoided in that any tax paid in Mauritius, whether directly or by deduction, by Hong Kong companies in accordance with the CDTA will be allowed as a credit against the tax payable in Hong Kong on the same income, subject to the provisions of the tax laws of Hong Kong.
Moreover, the Hong Kong-Mauritius CDTA also provides the following tax relief arrangements:
(a) Mauritius’ withholding tax rates for Hong Kong residents on interest and royalties will be capped at 5 per cent; and
(b) Profits from international shipping transport earned by Hong Kong residents arising in Mauritius will not be taxed in Mauritius.
This CDTA will come into force after the completion of ratification procedures by both jurisdictions. In the case of Hong Kong, it will be implemented by way of an order to be made by the Chief Executive in Council under the Inland Revenue Ordinance (Cap. 112). The order is subject to negative vetting by the Legislative Council.
