China and Hong Kong have signed the Fifth Protocol to their longstanding double tax avoidance agreement (DTA).
Business entities as well as individuals holding dual residency should note that the Fifth Protocol revises several aspects of the DTA’s tax residency and permanent establishment provisions.
The Fifth Protocol came into effect starting January 1, 2020 in mainland China and will be in effect from April 1, 2020 in Hong Kong.
Companies and individuals must review their tax position in both jurisdictions to avoid being challenged by tax authorities.