China (People's Rep.); Hong Kong

　　Report from Shiqi Ma, IBFD China

　　Protocol to tax agreement between China (People's Rep.) and Hong Kong – details

　　On 1 April 2015, China (People's Rep.) and Hong Kong signed the fourth protocol to the China (People's Rep.) - Hong Kong Income Tax Agreement (2006). Details of the protocol have become available and are as follows:

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　　Profits from the operation of ships or aircraft in the other side will be exempt from taxes in the other side including value added tax and alike.

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　　Withholding tax on royalties arising from the leasing of aircraft and ships is reduced to 5%.

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　　Gains derived by a resident of one side from the alienation of shares in listed companies resident in the other side are only taxable in the first side if the shares are purchased and sold in the same stock exchange. This also applies to an investment fund if the investment fund satisfies certain requirements.

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　　An anti-abuse clause is included in the tax agreement through the fourth protocol.

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　　The scope of the exchange of information provision has been extended to value added tax, business tax, consumption tax and land value appreciation tax and property tax.

　　The protocol still needs to be ratified by both countries.