HK-Georgia tax treaty to enter into force

The agreement will take affect on 1 July, after ratification procedures are completed.

The tax agreement that will prevent double taxation of companies in Hong Kong and Georgia is set to take effect on 1 July, once ratification procedures have been completed.

The Hong Kong government signed the Comprehensive Avoidance of Double Taxation Agreement (CDTA) with Georgia in October last year.

“The CDTA will have effect in respect of Hong Kong tax for any year of assessment beginning on or after 1 April 2022,” a government spokesman said.

“The CDTA will bring a greater degree of certainty on tax liabilities for those who engage in cross-border business activities, and help promote bilateral trade and investment activities.”

The agreement is in line with the government’s efforts to expand Hong Kong’s tax treaty network.

Georgia is considered an emerging economy, and is also a participant of the Belt and Road Initiative.

The CDTA sets out an allocation of taxing rights between the two jurisdictions.

Under the tax treaty, double taxation will be avoided, in that any tax paid in Georgia by Hong Kong companies will be allowed as a credit against the tax payable in Hong Kong on the same income.

Meanwhile, Georgian companies that paid taxes in Hong Kong will be allowed to make a deduction from the tax payable on the same income in Georgia.