Various countries already have a Double Taxation Agreement (DTA) in place with Hong Kong. A DTA is an agreement between two countries that reduces the tax bill for an individual who is a resident in one country but has citzenship in another country.
At the moment Hong Kong and Germany do not have a DTA but the second round of the double taxation agreement negotiations were coccluded on March 6, 2015. Hong Kong is taking efforts to find an agreement with Germany and catching up with latest global tax standards.
Germany and Hong Kong already have already several agreements in place. The Air Services Income Agreement and a Shipping Income Agreement have been in force since 1998 and 2005. These agreements avoid the double taxation from income generated from air transport and shipping.
Germany and Hong Kong are now one step further in closing a potential DTA and the benefits would be positive for both locations.
- Germany would become more competitive as other European countries already have a DTA with Hong Kong.
- As Hong Kong is an investment hub and head quarter for many international companies already, investments between Hong Kong and Germany would potentially increase.