Tsang on Asian business trips

Financial Secretary John Tsang is on the last leg of a tour to further promote Hong Kong’s advantages as a business destination to a trio of key Asian trading partners.

Tsang is now in Thailand after having visited Vietnam and Malaysia.

In Vietnam, Tsang met State Capital Investment Corporation Chief Executive Officer Lai Van Dao, to discuss the body's role in enhancing the efficiency of state capital utilisation.

The corporation currently manages more than 500 enterprises engaged in financial services, energy, manufacturing, telecommunications, transportation, consumer products, healthcare and information technology.

In Malaysia, Tsang signed an agreement with Malaysia for the avoidance of double taxation and the prevention of tax evasion with Minister of Finance II Ahmad Husni Mohamad Hanadzlah.
It is Hong Kong's 24th comprehensive tax agreement.

Tsang said the agreement will further strengthen the bilateral relationship by encouraging the flow of investment and talent between the two places.

Under the agreement, any Malaysian tax paid by Hong Kong companies doing business in Malaysia will be allowed as credit against the tax payable in Hong Kong in respect of the income.

The Malaysian withholding tax rate on Hong Kong residents receiving interest from Malaysia, now 15%, will be capped at 10%. Malaysian withholding tax on royalties will also be capped at 8%.

Malaysian withholding tax on fees for technical services, currently at 10%, will be capped at 5%.

Hong Kong residents’ profits from international shipping transport earned in Malaysia will not be taxed in the country.

In Bangkok, he will officiate at the gala premiere of the Hong Kong Film Festival 2012 and attend a business luncheon organised by the Trade Development Council.