The Mainland and the Hong Kong Special Administrative Region have reached the following agreement for the purpose of avoiding double taxation on income and preventing tax evasion:
Article 1 the scope of people
This arrangement applies to residents of one or both parties.
Article 2 Scope of taxes
1. This arrangement is applicable to all taxes levied by one party or its local authorities on income, regardless of the collection method.
Two, the tax levied on all income or a certain income, including the tax levied on the transfer of movable or immovable property and the tax levied on capital appreciation, shall be regarded as the tax levied on income.
Three. The current taxes applicable to this arrangement are:
(1) In the Mainland:
1. Personal income tax;
2. Income tax for foreign-invested enterprises and foreign enterprises.
(2) In Hong Kong:
1. Profits tax;
2. salaries tax;
3. Property tax.
Whether it is taxed according to personal income or not.
Four, this arrangement is also applicable to the same or substantially similar taxes collected after the signing of this arrangement, and any other taxes collected in the future that belong to the first or second paragraph of this article. The competent authorities of both parties shall notify each other of substantial changes in their respective tax laws within an appropriate time after the changes.
Five, the current tax together with the tax levied after the signing of this arrangement, hereinafter referred to as "mainland tax" or "Hong Kong Special Administrative Region tax".
Article 3 General definitions
1. In this Agreement, unless the context otherwise explains:
(a) the terms "one party" and "the other party" refer to the Mainland or the Hong Kong Special Administrative Region as the context requires;
(2) the term "tax" refers to mainland tax or Hong Kong Special Administrative Region tax, as the context requires;
(3) The term "person" includes individuals, companies, trusts, partnerships and other organizations;
(4) the term "company" means a corporate body or an entity treated as a corporate body for tax purposes;
(5) The term "enterprise" applies to all forms of commercial activities;
(6) "enterprise of one party" and "enterprise of the other party" refer to enterprises operated by residents of one party and enterprises operated by residents of the other party respectively;
(7) The term "sea transportation, air transportation and land transportation" refers to the transportation operated by an enterprise of one party by ships, planes or land vehicles, excluding the transportation operated by ships, planes or land vehicles only between places of the other party;
(8) The term "competent authority" means People's Republic of China (PRC) State Taxation Administration of The People's Republic of China or its authorized representative in the Mainland; In the Hong Kong Special Administrative Region, the Commissioner of Inland Revenue or his authorized representative, or any person or organization authorized to perform the functions currently performed by the Commissioner of Inland Revenue or similar functions;
(9) Business includes professional labor service activities and other independent activities.
Two, in this arrangement, "mainland tax" or "Hong Kong Special Administrative Region tax" does not include any fines or interest levied by either party according to the applicable tax laws of Article 2 of this arrangement.
3. When implementing this arrangement, unless otherwise explained in the context, one party shall have the meaning stipulated by the laws applicable to the taxes of this arrangement at that time. The definition of related terms in tax law takes precedence over the definition of the same terms in other laws.
Article 4 Residents
1. In this arrangement, the definition of "resident of one party" is as follows:
(1) In the Mainland, it refers to the person who is liable to pay taxes in the Mainland on the basis of domicile, domicile, location of head office, location of actual management institution or other similar standards. However, the term does not include people who are obliged to pay taxes in the mainland only because they earn income from the mainland;
(2) in the Hong Kong Special Administrative Region, means:
1. Individuals who usually reside in the Hong Kong Special Administrative Region;
2. Individuals who have stayed in the Hong Kong Special Administrative Region for more than 180 days in one year of assessment or two consecutive years of assessment (one of which is the relevant year of assessment);
3. Companies established in the Hong Kong Special Administrative Region, or companies established outside the Hong Kong Special Administrative Region and usually managed or controlled in the Hong Kong Special Administrative Region;
4. Other persons formed under the laws of the Hong Kong Special Administrative Region, or other persons formed outside the Hong Kong Special Administrative Region and usually managed or controlled in the Region.
Two, because of the provisions of the first paragraph, at the same time as the residents of both individuals, their identity should be determined according to the following rules:
(a) A resident of the party who shall be deemed to have a permanent residence; If both parties have fixed residences at the same time, they should be recognized as residents of the side with closer personal and economic relations (center of important interests);
(2) If the party whose center of vital interests is located cannot be determined, or if neither party has a habitual residence, it shall be deemed as a resident of the party whose habitual residence is located;
(3) If both parties have habitual residences, or neither of them has habitual residences, it shall be settled by the competent authorities of both parties through consultation.
Three, due to the provisions of the first paragraph, in addition to individuals, who are residents of both sides at the same time, should be considered as residents of the party where their actual management institutions are located.
Article 5 Permanent institutions
1. In this arrangement, the term "permanent establishment" refers to the fixed business place where the enterprise carries out all or part of its business.
2. The term "permanent establishment" includes, in particular:
(1) Business premises;
(2) branches;
(3) office;
(4) factories;
(5) Workplaces;
(6) Mines, oil or gas wells, quarries or other places for exploiting natural resources.
3. The term "permanent establishment" also includes:
(1) Construction site, construction, assembly or installation project, or supervision and management activities related to it, but only if the site, project or activity lasts for more than six months;
(2) The services provided by an enterprise of one party directly or through employees or other employees in the other party for the same project or related projects, including consulting services, are restricted only if they continue or accumulate for more than six months in any twelve-month period.
4. Notwithstanding the above provisions of this Article, the term "permanent establishment" shall be deemed not to include:
(1) Facilities specially used for storing, displaying or delivering the goods or commodities of the enterprise;
(2) Keeping the inventory of goods or commodities of the enterprise exclusively for the purpose of storage, display or delivery;
(3) Keeping the inventory of goods or commodities of this enterprise exclusively for processing by another enterprise;
(4) A fixed business place specially set up for purchasing goods and commodities or collecting information for the enterprise;
(5) A fixed business place specially set up for the enterprise to carry out other preparatory or auxiliary activities;
(6) A fixed business place specially set up for the combination of the activities in items (1) to (5) of this paragraph, but all activities of the fixed business place shall be preparatory or auxiliary.
Five, despite the provisions of the first and second paragraphs of this article, when a person (except the independent agent specified in the sixth paragraph) carries out activities on behalf of another enterprise, he has the right and often exercises this power to sign contracts in the name of the enterprise. Any activity carried out by the person for the enterprise shall be deemed that the enterprise has a permanent establishment in that party. Unless the activities carried out by this person through a fixed business place are limited to the provisions of paragraph 4, according to the provisions of that paragraph, the fixed business place shall not be regarded as a permanent establishment.
6. An enterprise of one party only conducts business in the other party through brokers, general commission agents or any other independent agents who regularly conduct their own business, and shall not be deemed to have a permanent establishment in the other party. However, if all or almost all the activities of the agent represent the enterprise, it shall not be regarded as an independent agent referred to in this paragraph.
7. The fact that a resident company of one party is controlled or controlled by a resident company of the other party or a company doing business in the other party (whether through a permanent establishment or not) cannot make any company of either party constitute a permanent establishment of the other company.
Article 6 Income from real estate
Income (including agricultural or forestry income) obtained by residents of one party from real estate located in the other party may be taxed in that other party.
Two, the term "real estate" shall have the meaning stipulated by the law of the party where the real estate is located. In any case, this term should include property attached to immovable property, livestock and equipment used in agriculture and forestry, rights stipulated in general laws applicable to immovable property, usufructuary rights of immovable property, rights to abnormal or fixed income obtained through mining or rights to exploit mineral deposits, resources and other natural resources. Ships and planes should not be regarded as immovable property.
Three, the provisions of the first paragraph of this article shall apply to the direct use, lease or use of real estate in any other form of income.
Four, the provisions of the first and third paragraphs of this article shall also apply to the income from immovable property of enterprises.
Article 7 Operating profit
1. The profits of an enterprise of one party shall be taxed only in that party, except that the enterprise conducts business in the other party through a permanent establishment located in the other party. If the enterprise conducts business in the other party through a permanent establishment located in the other party, its profits can be taxed in the other party, but only the profits belonging to the permanent establishment.
2. Except for the provisions of the third paragraph of this article, an enterprise of one party conducting business in the other party through a permanent establishment located in the other party shall be regarded as an independent branch enterprise engaged in the same or similar activities under the same or similar circumstances, and shall be regarded as a completely independent transaction between the permanent establishment and its affiliated enterprises. Under the above circumstances, the profits that the permanent establishment may obtain shall belong to the permanent establishment in all parties.
Three, when determining the profits of a permanent establishment, it shall be allowed to deduct all the expenses incurred by its business, including administrative and general management expenses, regardless of whether it occurs in the Contracting Party where the permanent establishment is located or anywhere else. However, with the exception of banking enterprises, royalties, remuneration or other similar payments paid by permanent institutions to the headquarters or other institutions of the enterprise by using patents or other rights, commissions for providing specific services or management, and interest paid from their loans shall not be deducted (except for the actual expenses incurred in repaying the advance payment). Similarly, when determining the profits of a permanent establishment, royalties, remuneration or other similar payments obtained by the permanent establishment from the headquarters or other offices of the enterprise for the use of patents and other rights, commissions for providing specific services or management, and interest earned from loans from the headquarters or other offices of the enterprise shall not be considered, except for banking enterprises (except for the actual expenses incurred in repaying the advance payment).
Four, if a party is used to the method of distributing the total profits of an enterprise to its subordinate units in a certain proportion, or determining the profits of a permanent establishment in accordance with other methods prescribed by its laws, the provisions of the second paragraph shall not prevent that party from determining its taxable profits in accordance with the above methods. However, the results obtained by the method adopted shall conform to the principles stipulated in this article.
5. Profits should not be attributed to a permanent establishment just because it purchases goods or commodities for an enterprise.
Six, in the above paragraphs, unless there are appropriate and sufficient reasons to change, the same method should be used to determine the profits attributable to the permanent establishment every year.
Seven, if the profits include income items separately stipulated in other articles of this arrangement, the provisions of this article shall not affect the provisions of other articles.
Article 8 Maritime, Air and Land Transport
1. The income and profits obtained by an enterprise of one party in the other party by operating shipping, air transportation and land transportation with ships, planes or land vehicles shall be exempted from tax (including mainland business tax).
Two, the provisions of the first paragraph of this article shall also apply to the income and profits obtained by participating in partnerships, joint ventures or participating in international business institutions, but only limited to the income and profits obtained in the above operations in proportion to the shares.
Article 9 affiliated enterprises
First, when:
(1) The enterprise of one party directly or indirectly participates in the management, control or capital of the enterprise of the other party, or
(2) The same person directly or indirectly participates in the management, control or capital of an enterprise and another enterprise,
In both cases, the commercial or financial relationship between two enterprises is different from that between independent enterprises. Therefore, the profits that should have been obtained by one of them, but not obtained due to these circumstances, can be included in the enterprise profits and paid taxes accordingly.
2. When one party counts the profits of the enterprise that has been taxed by the other party into the profits of the other party's enterprise (which should have been obtained by the other party's enterprise according to two independent enterprises under the same circumstances) and taxes it, the other party shall make appropriate adjustments to the taxes levied on this part of profits. When determining the above adjustment, we should pay attention to other provisions of this arrangement, and if necessary, the competent authorities of both parties should consult each other.
Article 10 Dividends
1. Dividends paid by a resident company of one party to residents of the other party can be taxed in that other party.
Two, however, these dividends can also be taxed according to the law of the company that pays the dividends is a resident. However, if the beneficial owner of the dividend is a resident of the other party, the tax shall not exceed:
(1) If the beneficial owner directly owns at least 25% of the shares of the company paying dividends, it is 5% of the total dividends;
(2) 10% of the total dividends in other cases.
The competent authorities of both parties shall negotiate to determine the way to implement the restricted tax rate.
This paragraph shall not affect the corporate profits tax levied on the profits paid by the company.
3. The term "dividend" in this article refers to the income obtained from shares or the right to share profits in non-creditor relations, as well as the income obtained from the rights of other companies that are regarded as shares in the same tax according to the law that the company distributing profits is a resident.
4. If the beneficial owner of dividends is a resident of one side, and the company paying dividends is the other side of its residents, and conducts business through a permanent establishment located in the other side, and the shares paying dividends are actually related to the permanent establishment, the provisions of paragraphs 1 and 2 of this article shall not apply. In this case, the provisions of Article 7 shall apply.
5. If a resident company of one party obtains profits or income from the other party, the other party shall not levy any tax on the dividends or undistributed profits paid by the company, even if the dividends or undistributed profits are all or part of the profits or income of the other party. However, the dividends paid to the residents of the other party or the shares paid with dividends are actually related to the permanent establishment established in the other party.
Article 1 1 interest
1. Interest incurred in one party and paid to residents of the other party can be taxed in that other party.
Two, however, these interests can also be taxed in the party where the interest occurs, according to the laws of that party. However, if the beneficial owner of the interest is a resident of the other party, the tax should not exceed 7% of the total interest. The competent authorities of both parties shall negotiate to determine the way to implement the restricted tax rate.
Three, despite the provisions of the second paragraph of this article, the interest incurred in one party and obtained by the government of the other party or the competent authorities of both parties shall be exempted from tax in that party.
4. The term "interest" as mentioned in this article refers to the income obtained by various creditor's rights, whether they are secured by mortgage or not, and whether they have the right to share the debtor's profits or not; Especially the income of public bonds, bonds or credit bonds, including their premiums and dividends. The liquidated damages for delayed payment shall not be regarded as the interest stipulated in this article.
5. If the beneficial owner of the interest is the government, local authorities or residents of one party, and its business is conducted in the other party through a permanent establishment located in the other party, and the creditor's rights on which the interest is paid are actually related to the permanent establishment, the provisions of paragraphs 1, 2 and 3 of this article shall not apply. In this case, the provisions of Article 7 shall apply.
Six, if the person who pays the interest is the government, local authorities or residents of one party, the interest shall be deemed to have occurred in that party. However, when the person paying interest, whether it is the government, local authorities or residents of one party, has a permanent establishment in one party, and the debt paying interest is related to the permanent establishment and bears interest, the above interest shall be deemed to have occurred in the party where the permanent establishment is located.
Seven, due to the special relationship between the payer and the beneficial owner or between them and others, so that the amount of interest paid exceeds the amount that the payer and the beneficial owner can agree for whatever reason without the above relationship, the provisions of this article only apply to the latter amount. In this case, the excess shall still be taxed according to the laws of the contracting parties, but due attention shall be paid to other provisions of this arrangement.
Article 12 royalties
1. Royalties incurred in one party and paid to residents of the other party can be taxed in that other party.
Two, however, these royalties can also be taxed in the party where they occur, in accordance with the laws of that party. However, if the beneficial owner of the royalties is a resident of the other party, the tax levied should not exceed 7% of the total royalties. The competent authorities of both parties shall negotiate to determine the way to implement the restricted tax rate.
3. Royalties mentioned in this article refer to all kinds of remuneration paid for using or having the right to use the copyright, patent, trademark, design or model, drawing, secret formula or secret program of literary, artistic or scientific works (including films and tapes used in movies, radio or television), or for using or having the right to use industrial, commercial and scientific equipment or information related to industrial, commercial and scientific experience.
4. If the beneficial owner of royalties is the government, local authorities or residents of one party, and the other party where royalties occur conducts business through a permanent establishment located in the other party, and the right or property to pay royalties is actually related to the permanent establishment, the provisions of paragraphs 1 and 2 of this article shall not apply. In this case, the provisions of Article 7 shall apply.
Five, if the payment of royalties is a party's government, local authorities or residents, it should be considered that the royalties occurred in that party. However, when the payer of royalties, whether it is a government, local authorities or residents, has a permanent establishment in one party, and the obligation to pay royalties is related to the permanent establishment, and the royalties are borne by it, the above royalties shall be deemed to have occurred in the party where the permanent establishment is located.
Six, due to the special relationship between the payer and the beneficial owner or between them and others, so that the amount of royalties paid exceeds the amount that the payer and the beneficial owner can agree without the above relationship, the provisions of this article only apply to the latter amount. In this case, the excess shall still be taxed according to the laws of the contracting parties, but due attention shall be paid to other provisions of this arrangement.
Article 13 Property income
1. The income obtained by a resident of one party from transferring the real estate located in the other party mentioned in Article 6 may be taxed in that other party.
Two, the transfer of an enterprise's movable property in the permanent establishment of the other party, including the transfer of the permanent establishment (alone or together with the whole enterprise), can be taxed in the other party.
3. Gains from the transfer of ships, aircraft or land vehicles engaged in maritime, air and land transport by an enterprise of one side, or the transfer of movable property belonging to the above-mentioned ships, aircraft and land vehicles, shall be taxable only in that Contracting Party.
4. The property of a company is mainly composed of real estate directly or indirectly located in one party, and the gains from the company's transfer of shares can be taxed in that party.
5. Gains from the transfer of any shares other than those mentioned in paragraph 4, which are equivalent to at least 25% of the shares of a resident company, may be taxed in that Contracting State.
6. Income from the transfer of property other than the property mentioned in the first to fifth paragraphs shall be taxed only on the side where the transferor is a resident.
Article 14 Income from employment
1. Except for the provisions of Articles 15, 17, 18, 19 and 20, salaries, wages and other similar remuneration obtained by residents of one party due to employment shall be taxed only in that party, except for employment activities in the other party. Remuneration obtained from employment activities in the other party may be taxed in that other party.
Two, despite the provisions of the first paragraph of this article, the remuneration obtained by a resident of one party engaged in employment activities in the other party shall be taxed only in that party if the following three conditions are met at the same time:
(1) In any 12-month period from the beginning or end of the relevant tax year, the payee has stayed in the other party continuously or cumulatively for no more than 183 days;
(2) The remuneration is paid by or on behalf of an employer who is not a resident of the other party;
(3) The remuneration is not borne by the permanent establishment established by the employer in the other party.
3. Notwithstanding the above provisions of this article, remuneration obtained from employment activities on ships, aircraft or land vehicles operated by enterprises of one party shall be taxed only in that party.
Article 15 Directors' Fees
Directors' fees and other similar payments paid by a resident of one side as a member of the board of directors of a resident company of the other side may be taxed in that other side.
Article 16 Artists and athletes
1. Notwithstanding the provisions of Articles 7 and 14, income derived by residents of one side as performers, such as drama, film, radio or television artists, musicians or athletes, from personal activities in the other side may be taxed in that other side.
2. Notwithstanding the provisions of Articles 7 and 14, the income obtained by performers or athletes from their personal activities does not belong to the performers or athletes themselves, but belongs to others, and can be taxed on the side where the performers or athletes engage in their activities.
Article 17 Pension
1. Except as stipulated in the second paragraph of Article 18, pensions and other similar remuneration (whether paid in installments or in lump sum) paid to residents of one party due to previous employment relationship shall be taxed only in that party.
Two, despite the provisions of the first paragraph of this article, pensions and other similar payments paid from the following pension plans (whether paid in installments or in one lump sum), namely:
(a) The government or local authorities implement public plans as part of the social security system;
(2) An arrangement in which individuals can participate to obtain retirement benefits, which is recognized for tax purposes according to the laws of one party.
Taxes should only be levied on the party implementing the plan.
Article 18 Government services
1. Salaries, wages and other similar remuneration paid by the government or local authorities of one party to individuals who perform government duties and provide services for them shall be taxed only in that party.
(2) However, if the service is provided in the other party, and the individual providing the service is a resident of the other party, and the resident becomes a resident of the other party not only because of providing the service, the salary, wages and other similar remuneration shall be taxed only in the other party.
2. (1) Pensions paid by the government or local authorities of a party, or pensions paid to individuals who provide services to them from funds established by them, or pensions paid as employers (whether paid in installments or in one lump sum) shall be taxed only in that party.
(2) However, if the individual providing services is a resident of the other party, and the situation conforms to the provisions of Item 2 of Paragraph 1 of this Article, the corresponding pension (whether paid in installments or in lump sum) shall be taxed only in the other party.
Three, the provisions of Article 14, Article 15, Article 16 and Article 17 shall apply to the remuneration and pension obtained by providing services for the business of the government or local authorities.
Article 19 Students
Students who are or used to be residents of the other party before leaving for the other party stay in the other party only for the purpose of receiving education, and the other party shall be exempt from taxes on the money they receive for their living and receiving education.
Article 20 Other income
1. Income derived by residents of one side, no matter where it occurs, shall be taxed only in that side if it is not specified in the above articles of this arrangement.
2. The provisions of the first paragraph of this article shall not apply to the income other than the income from immovable property stipulated in the second paragraph of Article 6, if the payee is a resident of one party and conducts business in the other party through a permanent establishment established in the other party, and the rights or property obtained by the payment are actually related to the permanent establishment. In this case, the provisions of Article 7 shall apply.
3. Notwithstanding the provisions of the first and second paragraphs of this article, the income obtained by a resident of one side from the other side may be taxed in that other side according to the laws of that side if there are no provisions in the above-mentioned articles of this arrangement.
Article 21 Methods of eliminating double taxation
1. In the Mainland, double taxation is eliminated as follows:
Income obtained by mainland residents from the Hong Kong Special Administrative Region and taxes paid in the Hong Kong Special Administrative Region in accordance with the provisions of this arrangement may be credited against the taxes levied on the residents in the Mainland. However, the amount of credit shall not exceed the mainland tax calculated according to the mainland tax laws and regulations.
Two, in the Hong Kong Special Administrative Region, the elimination of double taxation is as follows:
Unless the laws and regulations of the Hong Kong Special Administrative Region provide otherwise for granting tax reductions and credits to any area outside the Hong Kong Special Administrative Region, the income earned by residents of the Hong Kong Special Administrative Region from the Mainland and the taxes paid in the Mainland in accordance with the provisions of this arrangement are allowed to be credited against the Hong Kong Special Administrative Region taxes levied on the residents. However, the credit amount shall not exceed the tax amount of the Hong Kong Special Administrative Region calculated according to the tax laws and regulations of the Hong Kong Special Administrative Region.
3. If a resident company of one party pays dividends to a resident company of the other party, and the resident company of the other party directly or indirectly controls not less than 10% of the shares of the dividend-paying company, the amount of credit available to the resident company of the other party shall include the tax payable by the dividend-paying company for the profit (but not more than the appropriate portion corresponding to the dividend).
Article 22 Non-discriminatory treatment
1. The tax treatment of one party's enterprise in the permanent establishment of the other party shall not be lower than that given by the other party to local enterprises engaged in the same activities. This provision should not be understood as any deduction, preferential treatment and relief given by one party to the residents of the other party because of its citizenship and family burden must also be given to the residents of the other party.
2. Except for the provisions of Paragraph 1 of Article 9, Paragraph 7 of Article 11 or Paragraph 6 of Article 12, the interest, royalties and other funds paid by an enterprise of one party to the residents of the other party shall be deducted in the same way as those paid to the residents of the other party under the same circumstances when determining the taxable profit of the enterprise.
Three, all or part of the capital of an enterprise of one party is directly or indirectly owned or controlled by one or more residents of the other party, and the tax or related conditions borne by the enterprise in that party should not be different from or heavier than those borne by other similar enterprises of that party.
Article 23 Consultation procedures
1. When someone thinks that the measures taken by one or both parties have caused or will cause taxation that does not conform to the provisions of this arrangement, he may submit the case to the competent authority where he is a resident, regardless of the remedies in his own country's laws. The case must be filed within 3 years from the date of the first notice of tax measures that do not meet the provisions of this arrangement.
Two, if the competent authorities think that the opinion is reasonable, and can not be resolved satisfactorily unilaterally, they should try to negotiate with the other competent authorities to avoid taxation that does not conform to this arrangement. The agreements reached should be implemented without the time limit of their respective domestic laws.
Three, the competent authorities of both sides should try to solve the difficulties or questions in the interpretation or implementation of this arrangement through agreement, and can also negotiate on the elimination of double taxation issues not stipulated in this arrangement.
Four, the competent authorities of both parties can contact directly, in order to reach the agreement mentioned in the second and third paragraphs of this article. In order to help reach an agreement, representatives of the competent authorities of both sides can hold talks and exchange views orally.
Article 24 Exchange of information
1. The competent authorities of both parties shall exchange information required for the implementation of the provisions of this arrangement, or information required for the provisions of their respective domestic laws on the types of taxes covered by this arrangement (to the extent that taxation according to these laws does not conflict with this arrangement), especially information on preventing tax evasion. The exchange of information is not restricted by article 1. The information received by one party shall be treated equally with the information obtained according to the laws of the other party, and shall only be informed to the relevant personnel or institutions (including courts and administrative departments) involved in the investigation, collection, execution, prosecution or judgment of the taxes included in this arrangement. The above-mentioned personnel or authorities may only use the information for the above-mentioned purposes, but they may disclose the information in open court proceedings or judicial decisions (including the decision of the Tax Appeal Board on the Hong Kong Special Administrative Region).
Two, the provisions of the first paragraph in any case, should not be understood as a party has the following obligations:
(1) Taking administrative measures that violate the laws and administrative practices of one party or the other;
(2) Providing information that one party or the other party cannot obtain according to laws or normal administrative channels;
(3) Providing information that discloses any trade, management, industry, commerce, professional secrets or trade process, or information that would violate public policy once disclosed.
Article 25 Other rules
This arrangement does not affect the rights of all parties to implement their local laws and measures on tax evasion (whether called tax evasion or not). "Laws and measures for tax avoidance" include laws and measures to prevent, deter, avoid or resist any transaction, arrangement or practice that aims at or will give tax preference to anyone.
Article 26 comes into force.
1. This arrangement shall come into effect on the date when the last party issues a notice after each party has fulfilled the necessary approval procedures and notified the other party in writing. This arrangement will apply to income earned in the following years:
(1) In the Mainland: the tax year starting on or after January 1st of the year following the effective year of the arrangement;
(2) In the Hong Kong Special Administrative Region: the year of assessment that begins on or after April 1 day of the year following the effective year of the arrangement.
2. The Arrangement for the Avoidance of Double Taxation on Income between the Mainland and the Hong Kong Special Administrative Region, which was formally signed on February1998/1,shall cease to take effect as of the date when this arrangement applies to the relevant taxes according to the provisions of the first paragraph of this article.
Paragraph 6 of Article 11 of the Arrangement on Air Transport between the Mainland and the Hong Kong Special Administrative Region, which was formally signed on February 2, 2000, shall cease to take effect as of the date when this arrangement applies to the relevant taxes according to the provisions of the first paragraph of this article.
Article 27 Termination
This arrangement should be effective for a long time. However, either party may terminate this Agreement by giving a written notice to the other party on or before June 30th of any calendar year five years after the effective date of this Agreement. In this case, this arrangement shall cease to take effect as of the following years:
(1) In the Mainland: the tax year starting on or after January 1 of the year following the year in which the notice of termination is issued;
(2) In the Hong Kong Special Administrative Region: the year of assessment commencing on or after April 1 of the year following the year in which the notice of termination is issued.
In witness whereof, the following duly authorized representatives have signed this Agreement.
This arrangement was signed in Hong Kong on August 2 1 2006 in duplicate, each in Chinese.