26 April 2013EMEA analysis

Guernsey signs DTA with Hong Kong

The latest Direct Taxation Arrangement (DTA) to be signed into law is between Guernsey and Hong Kong. This DTA marks the seventh Guernsey has signed, including arrangements with Britain, Malta, Jersey, Qatar and Singapore.

The DTA, according to Guernsey Finance chief executive Fiona Le Poidevin, means that individuals and companies based in one jurisdiction but with interests in the other will avoid being taxed by both sets of authorities on the same income. The DTA is also intended to increase the possibility of expansion into Hong Kong for Guernsey’s financial services business.

A number of Guernsey-based firms have offices in Hong Kong and the island’s finance industry has worked particularly closely with counterparts in China and Hong Kong since the establishment of a Guernsey Finance office in Shanghai at the end of the 2007.

Chief minister Peter Harwood, who signed the DTA on behalf of Guernsey, commented: “the signing of this DTA, combined with the visit of the Chinese Ambassador to the UK to Guernsey this week, recognises the importance attached to Guernsey’s business relationship in the Far East. The agreement is expected to bring significant commercial benefits to our finance sector, resolving issues relating to potential double taxation, and leading to greater opportunities for new business.”