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Belgium's avoidance of double taxation agreement with Hong Kong could benefit not only Belgian companies, but also other EU companies wanting to invest or do business in Hong Kong or use the Territory as a gateway to Asia, Belgium's Vice-Prime Minister and Minister of Finance Mr Didier Reynders said in Brussels on Tuesday (April 24, Brussels time).
He said Hong Kong was the gateway to China and Asia for European companies just like Belgium was the gateway to Europe for Chinese and Asian investors.
Mr Reynders was speaking at a luncheon meeting hosted by the Hong Kong Economic and Trade Office, Brussels as the first of a series of events in Europe to celebrate the 10th anniversary of the establishment of the Hong Kong Special Administrative Region.
Commending Belgium's friendship with Hong Kong, Mr Reynders told 120 Belgian businessmen, officials of the European Commission and the Belgian government and members of the diplomatic corps that it had been a pleasure to negotiate the Agreement for the Avoidance of Double Taxation with the HKSAR.
Guests were told the agreement, concluded in 2003 and effective since 2004, was good news not only for Belgian and Hong Kong companies, but also for all companies and branches of foreign companies passing through Belgium to invest in Asia.
The agreement, the first of its kind between Hong Kong and a major European economy, brought tax savings to Hong Kong and Belgian investors doing business in each other's area, ensuring that investors did not have to pay tax twice on a single source of income.
To benefit, companies must be incorporated in Belgium or Hong Kong or have their central management and control there. By locating their holding company or the financial centre for their European business in Belgium, profits can be repatriated tax free to Belgium from Hong Kong.
In the same way, the agreement was beneficial for Hong Kong incorporated companies wishing to invest in the EU. Hong Kong entities would also have the opportunity to access the benefits of EU directives as well as the many treaties Belgium has concluded with non-EU countries.
Hong Kong's Special Representative for Economic and Trade Affairs to the European Communities, Mr Duncan Pescod, said the special relationship that had developed between Hong Kong and Belgium over the years has manifested itself through close cultural, social and economic links. "The signing of a landmark agreement on the avoidance of double taxation in 2003 demonstrated our realistic and pragmatic approach to bilateral issues," he said.
Mr Pescod said 2007 was the 10th anniversary of the reunification of Hong Kong with China. "This luncheon marks the start of a series of events organised in Belgium and elsewhere in Europe to mark this occasion as part of our celebrations. We are celebrating not only reunification, but equally important, we are celebrating the successful implementation of 'One Country, Two Systems'. This visionary arrangement has allowed Hong Kong not only to maintain its traditional way of life but to flourish economically, socially and culturally in the 10 years since 1997."
Ends/Wednesday, April 25, 2007
Issued at HKT 16:51
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