013 Basic intent agreement of Tax Convention between Japan and Hong Kong
Financial Services Agency of Japan announced on March 31 2010 that Japan and Hong Kong had come to a basic intent agreement of Tax Convention. Japan has already had a Tax Treaty with China, but not with Hong Kong. Therefore, this is good news not only for those companies which have already invested or had business in Hong Kong, but also those which are planning to do so in the future.
Advantages which will be offered by the tax treaty is (1)to enable tax agencies of both countries to exchange information mutually and (2)to reduce the tax rate imposed on income from investment activities (see a table blow). The treaty will be effective after the process of both governments signing and ratifying the agreement. More and more Japanese companies would consider that Hong Kong is as attractive a market as China, and more investment and business in and to Hong Kong should be expected.
| Income from investment | Category | Tax Rate |
| Dividends | Between parent and subsidiary companies（Ratio of shareholding over 10％） | 5％ |
| Others | 10％ | |
| Interest received | Governments | Exempt |
| Others | 10％ | |
| Rental fees | ― | 5％ |
