Sri Lanka - Hong Kong double taxation relief agreement

A limited agreement for avoidance of double taxation with respect to taxes on income derived from shipping and air transport between Sri Lanka and Hong Kong entered into force on March 29. In terms of Article 5 of the Agreement, it is applicable in Sri Lanka, for any year of assessment commencing on or after April 1, 2005,the Finance Ministry said yesterday.

This Agreement is restricted to the avoidance of Double Taxation on shipping profits and airline profits as Hong Kong tax only on income derived from their country. Under this Agreement, profits from operation of ships in the international traffic are charged to tax in the source country subject to a reduction of the tax so charged by 50%.

The profits from the operation of aircraft in the international traffic are fully exempt in the country of source.