Double Tax Agreement (China) Order 2019

[1] For example, if, as of July 1, 2019, a Hong Kong resident employed at a Hong Kong university is teaching at a continental university and eligibility requirements are met, income paid by the University of Hong Kong and taxed in Hong Kong is eligible for tax exemption in mainland China as of January 1, 2020. This agreement does not affect the tax privileges of members of diplomatic or consular missions, in accordance with the general rules of international law or the provisions of specific agreements. The text of the convention is contained in taxpolicy.ird.govt.nz/tax-treaties/china double taxation relates to the double tax debt of a taxpayer in two or more jurisdictions if he receives foreign income. This double taxation can be a burden on non-residents who live and work in China when covered by tax resident status. As a general rule, foreigners are not domiciled in China, as their stay in China is temporary. A resident is therefore a person who lives in China because of household registrations, family or economic benefits. All PRC nationals are considered domiciled and must pay both China-related and global income. If, under paragraph 1, a person other than a person resides in the two contracting states, the competent authorities of the contracting states endeavour to determine by mutual agreement the State party whose residence is determined by that person for the purposes of this Convention with respect to his actual place of management, the place where he is registered or otherwise justified, as well as other relevant factors. In the absence of such an agreement, that person is not entitled to an exemption or exemption under this Convention, unless the competent authorities of the contracting states exempt any such exemption. Paul Dwyer, Director of International Tax Pricing and Transfer Practices at Dezan Shira-Associates, said: “Given Italy`s active participation in the Chinese BIS and an otherwise unpredictable KLIMA between the EU and China, the new agreement aims to further promote and develop bilateral cooperation between these nations.” In New Zealand, double taxation must be abolished as follows: however, with the introduction of tax treaties between China and several countries, foreign persons can now benefit from double taxation relief by the Chinese government. Keep reading! Despite Article 6, the 1986 double taxation order (China) remains valid in New Zealand for any tax covered by the Convention until the agreement enters into force with respect to that tax, in accordance with Article 28 of the Convention.

The competent authorities of the contracting states can communicate directly with each other in order to reach an agreement within the meaning of paragraphs 2 and 3. Where it appears desirable to reach an agreement, representatives of the competent authorities of the contracting states may meet for an oral exchange of views. “The new agreement also improves the ability of both countries to detect and prevent tax evasion. It will contribute to the overall integrity of New Zealand`s tax system. With regard to the licence clause, and in particular the definition, the tendency in updating tax treaties was to “remove the use or right to use commercial, scientific or commercial equipment” from the royalty definition, so that such payments are taxed as corporate profits in accordance with Article 7 (i.e. where there is a stable institution). However, the new agreement has not changed and these payments will continue to be considered royalties for DBA purposes.