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New Requirements Relating to Double Taxation Relief – Salaries Tax

The Inland Revenue (Amendment) (No. 6) Ordinance 2018 (“the Amendment Ordinance”) was enacted on 13 July 2018. The Amendment Ordinance provides for, among others, the following new requirements relating to double taxation relief:

  1. The relief under section 8(1A)(c) of the Inland Revenue Ordinance (Cap. 112) (“IRO”) does not apply to income derived by a taxpayer from services rendered in a territory with which Hong Kong has entered into a comprehensive avoidance of double taxation agreement or arrangement (“CDTA”), i.e. a DTA territory. For income derived from services rendered in a DTA territory, a taxpayer will be entitled to claim credit in respect of foreign tax payable on the income under section 50 of the IRO;
  2. The relief under section 8(1A)(c) or foreign tax credit granted under section 50 must not exceed the relief that would be allowed had the taxpayer taken reasonable steps to minimise his or her foreign tax liability under the laws of the foreign territory or the CDTA concerned; and
  3. If the relief under section 8(1A)(c) or tax credit under section 50 is allowed to a taxpayer and subsequently such relief or credit becomes excessive as a result of an adjustment to his or her foreign tax liability, the taxpayer is required to give a written notice to the Commissioner within 3 months after the adjustment is made.


The above requirements apply in relation to tax payable for a year of assessment beginning on or after 1 April 2018 (i.e. 2018/19 onwards).

In respect of the 2018/19 tax returns received on or after 1 January 2019, the above requirements have to be duly observed.