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How can an expatriate employee working in China and Hong Kong avoid double taxation?

How can an expatriate employee working in China and Hong Kong avoid double taxation?

The Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation on Income ("the Arrangement") is effective from April 1, 1998 in Hong Kong and July 1, 1998 in Mainland China. It is aimed at preventing the imposition of income tax and other similar taxes in both Hong Kong and in the Mainland. Specifically, it covers PRC individual income tax and foreign enterprise income tax, and the parallel Hong Kong taxes: salaries tax, profits tax and tax charged under personal assessment. Thus, the Arrangement could affect the expatriate employee from the start of his employment in the Mainland, and may also have some bearing on the employer.

 

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