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By International Assignment Services

May 2012, Issue 12

A good news to eliminate double taxation in China for Hong Kong (and Macao) tax resident employees

About two years ago, PwC, together with some business chambers and professional bodies, flagged the double taxation problems being faced by Hong Kong employees working in China in certain circumstances to both the Chinese State Administration of Taxation (“SAT”) and Hong Kong Inland Revenue Department (“IRD”) through different channels. Since then, these tax authorities have taken it very seriously with the common goal to resolve these problems through consultation. We are very pleased to see that the SAT has finally issued the Public Notice [2012] No. 16 (“PN 16”) dated 26 April 2012 to address these problems in favor of the Hong Kong (and Macao) tax residents. PN 16 takes effect from 1 June 2012 and applies to income obtained after the effective date.

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