(July 6, 2015)

On July 6, 2015 both on the website of the Japanese Ministry of Finance as well as on the website of the Hong-Kong Inland Revenue Department a press release was published that the Exchanged Notes concerning the Exchange of Information in relation to the Hong Kong – Japanese DTA enters into force on July 6, 2015.

The notes were exchanged in December 2014 and arrange that the countries will exchange notes for more taxes than initially was agreed upon in the Agreement between the Government of Japan and the Government of the Hong Kong Special Administrative Region of the People’s Republic of China for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and the related Protocol.

By the exchange of the notes, the both Governments confirm the understanding that information concerning the following taxes shall be exchanged in accordance with the provisions of Article 25 of the Agreement:

(a)   the taxes covered by Article 2 of the Agreement; and

(b)   the following taxes of Japan:

(i)         the inheritance tax;

(ii)        the gift tax;

(iii)      the consumption tax; and

(iv)      any identical or substantially similar taxes that are imposed after the date of signature of the notes (December 10, 2014) in addition to, or in place of, the existing taxes referred to in (i), (ii) and (iii).

Up until now, the two Governments have not been obliged to exchange information concerning the taxes other than those referred to in (a) under the provisions of paragraph 7 of the Protocol which forms an integral part of the Agreement. After the entry into force of the agreement between the two Governments which is constituted by the exchange of the notes, they will be obliged to exchange information concerning the taxes referred to in (b) as well as (a).

Based on the information provided by both the Japanese and the Hong Kong authorities that the Exchanged Notes entered in to force on July 6, 2015 this means that the Exchanged Notes shalle have effect:

(a)   in the case of the Hong Kong Special Administrative Region:

with respect to Hong Kong Special Administrative Region tax, for any year of assessment beginning on or after July 6, 2015; and

(b)    in the case of Japan:

(i)         with respect to taxes withheld at source, for amounts taxable on or after July 6, 2015;

(ii)        with respect to taxes on income which are not withheld at source, as regards income for any taxable year beginning on or after July 6, 2015; and

(iii)       with respect to other taxes, as regards taxes for any taxable year beginning on or after July 6, 2015.

Click here to be forwarded to the Notes exchanged in December 2014.

Click here to be forwarded to the Agreement between the Government of Japan and the Government of the Hong Kong Special Administrative Region of the People’s Republic of China for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and the related Protocol as concluded in 2010.

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