(Source : Government Information Centre)
Speech by SFST at the Signing Ceremony for the Comprehensive
Agreement for the Avoidance of Double Taxation (English only)
Following is a speech by the Secretary for Financial Services and the Treasury, Mr Frederick Ma, in Bangkok today (September 7) at the Signing Ceremony for the Comprehensive Agreement for the Avoidance of Double Taxation:
Your Excellency, the Hon Bernard Chan, Ladies and Gentlemen,
It gives me great pleasure being here today to represent the Hong Kong Special Administrative Region for signature of the Comprehensive Agreement for the Avoidance of Double Taxation with the Kingdom of Thailand. For Hong Kong, this is very important as it is the first such agreement we sign with an Asia Pacific country.
Hong Kong and Thailand have been maintaining a very friendly relationship and engaging in co-operation in many areas, including taxation. The signing of the Comprehensive Agreement today is one manifestation of our co-operative efforts. We also have many things in common. For instance, both Hong Kong and Thailand have risen to the challenge of the Asian Financial Crisis and recovered from it with flying colours.
In fact, Hong Kong and Thailand are closely linked with each other in many aspects. Thailand is a major tourist destination for Hong Kong people. When talking about Thailand, many Hong Kong people will immediately recall its rich legacy of history and culture, as well as its beautiful natural scenery, particularly in Phuket and other outlying islands.
But tourism is only part of the huge amount of business that is carried on between Thailand and Hong Kong. In 2004, Thailand was our 10th largest trading partner world-wide and the seventh largest in Asia. The average annualised growth rate in bilateral trade between the two places from 2000 to 2004 was 8.4%, one of the highest that Hong Kong experienced with its trading partners over the same period.
As for the flow of investment, Thailand ranked 19th among the major sources of inward investment into Hong Kong at the end of 2003, with a total stock of HK$5.1 billion, whereas it was the eighth major recipient country of our outward direct investment, with a stock amounting to HK$21.6 billion.
Today, we sign a very important agreement for the avoidance of double taxation. The agreement ensures that investors will not have to pay tax twice on the same income. In simple terms, the agreement will translate into tax savings to Thai and Hong Kong investors doing business in each other's area through the allocation of taxing rights between the two places, and the provision of relief in the case of double taxation. Moreover, it formalises the tax relief currently offered by the two tax authorities, thus providing a higher level of certainty and stability to existing and potential investors alike. As a result, it will offer added incentives for businesses in Hong Kong and Thailand to enhance their cross-border investments and activities, thus fostering closer economic ties between the two places.
Your Excellency, with the signing of the Agreement today, we open a new chapter in our relationship with Thailand. I am sure that in the years to come, the economic and financial ties between the two places will become closer, and our bilateral co-operation and exchanges will grow from strength to strength.
Ends/Wednesday, September 7, 2005
Issued at HKT 17:50