The French Economics Minister Christine Lagarde and the Hong Kong Secretary of Finance from China, John Tsang, will sign an agreement for avoidance of double taxation today. Mr Tsang said that the deal would eliminate double taxation and provide more beneficial tax rights for investors in Hong Kong and France.
This agreement will promote exchanges of investment, know-how and technology between the two parties, said Mr Tsang during a speech at a working lunch.
According to the French Ministry of Economics, the agreement is the result of ten years of negotiations. He added that France could obtain information necessary for the implementation of tax legislation in Hong Kong. In contrast, Hong Kong investors could benefit from a reduction of 10% withholding on passive income (such as dividends, interest and royalties). Today, 700 French companies reside in Hong Kong.
A source from the French Ministry of Finance said that last year Hong Kong represented a two billion euro trade surplus for France. This year it will probably represent a three billion euro trade surplus.
John Tsang arrived in Paris on Wednesday to begin a two-day visit, which began with a working lunch which was attended by the French Secretary of State for Foreign Trade, Anne-Marie Idrac.