Specification of Arrangements (Government of the United Kingdom of Great Britain and Northern Ireland) (Avoidance of Double Taxation on Shipping Income) Order
(Enacting provision omitted—E.R. 4 of 2020)
[2 March 2001]
(Format changes—E.R. 4 of 2020)
For the purposes of section 49 of the Ordinance, it is declared that the arrangements referred to in section 2 have been made with the Government of the United Kingdom of Great Britain and Northern Ireland with a view to affording relief from double taxation in relation to income tax and any tax of a similar character imposed by the laws of the Kingdom, and that it is expedient that those arrangements should have effect.
The arrangements mentioned in section 1 are in Articles 1 to 6 of the Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Hong Kong Special Administrative Region of the People’s Republic of China for the Avoidance of Double Taxation on Revenues Arising from the Business of Shipping Transport done in duplicate at Hong Kong on 25 October 2000 in the English language as specified in the Schedule and having effect according to the tenor of that Agreement.
(1) This Agreement shall apply to taxes on income and on capital.
(2) The existing taxes to which this Agreement shall apply are in particular:
in the case of the United Kingdom:
the income tax;
the corporation tax; and
the capital gains tax;
in the case of the Hong Kong Special Administrative Region,
profits tax.
(3) This Agreement shall also apply to any identical or substantially similar taxes which are imposed by either Contracting Party after the date of signature of this Agreement in addition to, or in place of, the existing taxes. The competent authorities of the Contracting Parties shall notify each other of any substantial changes which have been made in their respective taxation laws.
(1) For the purposes of this Agreement, unless the context otherwise requires:
in the case of the United Kingdom, the Commissioners of Inland Revenue or their authorised representative;
in the case of the Hong Kong Special Administrative Region, the Commissioner of Inland Revenue or his authorised representative or any person or body authorised to perform any functions at present exercisable by the Commissioner, or similar functions;
in the case of the United Kingdom of Great Britain and Northern Ireland a business carried on by a person who, under the law of the United Kingdom of Great Britain and Northern Ireland, is liable to tax therein by reason of his domicile, residence, place of management, place of incorporation or any other criterion of a similar nature;
in the case of the Hong Kong Special Administrative Region a business carried on by a person as an operator of ships and which is managed and controlled in the Hong Kong Special Administrative Region.
For the purposes of this sub-paragraph, the Government of a Contracting Party shall be deemed to be an individual resident of that Contracting Party, and an enterprise of one Contracting Party shall not at the same time be an enterprise of the other Contracting Party;
(2) As regards the application of this Agreement at any time by a Contracting Party, any term not defined therein shall, unless the context otherwise requires, have the meaning that it has at that time under the laws of that Party for the purposes of the taxes to which this Agreement applies, any meaning under the applicable tax laws of that Party prevailing over a meaning given to the term under other laws of that Party.
(1) Profits of an enterprise of a Contracting Party from the operation of ships in international traffic shall be taxable only in the area of that Party.
(2) For the purposes of this Article, profits from the operation of ships in international traffic include:
revenues and gross receipts from the operation of ships for the transport of persons, livestock, goods, mail or merchandise;
profits from the rental on a full (time or voyage) or bareboat basis of ships; and
profits from the use, maintenance or rental of containers (including trailers and related equipment for the transport of containers) used for the transport of goods or merchandise;
where such rental or such use, maintenance or rental, as the case may be, is incidental to the operation of ships in international traffic; and
interest on funds directly connected with that operation.
(3) The provisions of paragraph (1) of this Article shall also apply to profits from the participation in a pool, a joint business or an international operating agency, but only to so much of the profits so derived as is attributable to the participant in proportion to its share in the joint operation.
(4) Gains derived by an enterprise of a Contracting Party from the alienation of ships operated in international traffic by that enterprise, or movable property pertaining to the operation of such ships, shall be taxable only in the area of that Party.
(5) Capital of an enterprise of a Contracting Party represented by ships operated by that enterprise in international traffic, or by movable property pertaining to the operation of such ships, shall be taxable only in the area of that Party.
The competent authorities of the Contracting Parties shall, through consultation, endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of this Agreement.
Each of the Contracting Parties shall notify to the other the completion of the procedures required by its law for the bringing into force of this Agreement. This Agreement shall enter into force on the date of the later of these notifications and shall thereupon have effect:
in the United Kingdom:
in respect of income tax and capital gains tax, for any year of assessment beginning on or after 6th April in the calendar year next following that in which this Agreement enters into force;
in respect of corporation tax, for any financial year beginning on or after 1st April in the calendar year next following that in which this Agreement enters into force;
in the Hong Kong Special Administrative Region, for any year of assessment beginning on or after 1st April in the calendar year next following that in which this Agreement enters into force.
This Agreement shall remain in force until terminated by one of the Contracting Parties. Either Contracting Party may terminate this Agreement by giving written notice of termination at least six months before the end of any calendar year. In such event, this Agreement shall cease to have effect:
in the United Kingdom:
in respect of income tax and capital gains tax, for any year of assessment beginning on or after 6th April in the calendar year next following that in which the notice is given;
in respect of corporation tax, for any financial year beginning on or after 1st April in the calendar year next following that in which the notice is given;
in the Hong Kong Special Administrative Region, for any year of assessment beginning on or after 1st April in the calendar year next following that in which notice is given.”.