Taxation agreement signed by Hong Kong and Mauritius

To promote economic and trade connections between Hong Kong and Mauritius, a comprehensive avoidance of double taxation agreement (“CDTA”) was signed by Hong Kong and Mauritius on 7 November 2022, which sets out the allocation of taxing rights between the two jurisdictions and helps investors better assess their potential tax liabilities from cross-border economic activities.

Under this CDTA, double taxation will be avoided in that any tax paid in Mauritius by Hong Kong companies under the agreement 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.

This CDTA also provides tax relief arrangements as follows:

(i) Mauritius' withholding tax rates for Hong Kong residents on interest and royalties will be capped at 5%; and

(ii) Profits from international shipping transport earned by Hong Kong residents arising in Mauritius will not be taxed in Mauritius.

This is the 46th CDTA concluded by Hong Kong, which will come into force after ratification procedures are completed by both jurisdictions. This signifies the Hong Kong Special Administrative Region Government’s sustained effort to negotiate with trading and investment partners in expanding Hong Kong’s tax treaty network.

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