A Comprehensive Double Tax Agreement (CDTA) between Hong Kong and Italy was signed on January 14, 2013. This incorporates tax information exchange provisions based on the Organisation for Economic Cooperation and Development’s latest international standard.
The CDTA between the two parties came into force on August 10, 2015 after both sides have completed the confirmation procedures. Hong Kong’s Secretary for Financial Services and the Treasury stated that by coming into force of the CDTA, any concerns that the Italian authorities have regarding Hong Kong’s commitment to enhancing tax transparency and fighting cross-border tax evasion.
Hong Kong has been committed all along to expanding its network of CDTAs since it already has 32 CDTAs so far including the one signed with Italy. This prevents Hong Kong’s companies that are doing business through a permanent establishment in other countries to avoid been taxed in both jurisdictions. One of the main reasons that Hong Kong was waiting for the CDTA to come into force, was protecting the businesses and companies that are doing business in Italy as well.
However, with entry into force of mutual CDTA, Hong Kong hopes that Italy will remove them from their blacklist of jurisdictions that do not share tax information.