November 2020 / Hong Kong

November 26 2020

Three Authorities Unveil Preferential VAT Policies for Insurance and Export Companies at GBA

The Ministry of Finance, the General Administration of Customs and the State Taxation Administration recently issued the Circular about Implementing Value-added Tax Policies at the Guangdong-Hong Kong-Macau Greater Bay Area.

From October 1, 2020 to December 31, 2023 insurance companies registered in Guangzhou will be exempted from value-added tax for revenues received from providing international shipping insurance to enterprises registered in Nansha free trade zone; from October 1, 2020 eligible export companies can get tax rebate for container goods shipped to foreign markets from Nansha bonded port zone and Qianhai bonded port zone.

November 10 2020

United States Announces Termination of Shipping Agreement with Hong Kong

On 20 October 2020, the US Internal Revenue Service (IRS) issued announcement 2020-40, communicating that the United States provided a written notification dated 18 August 2020 to the government of the Hong Kong Special Administrative Region on the termination of the Honk Kong - United States Shipping Tax Agreement (1989). The termination of the agreement shall take effect on 1 January 2021 and shall have effect for taxable years beginning on or after that date.

Under the Honk Kong - United States Shipping Tax Agreement (1989), income was exempt from tax in one contracting state for income derived from the international operation of ships by residents of the other contracting state.

According to paragraph 8 of the first note of the exchange of notes, either government may terminate the agreement by giving written notice of termination.