HONG KONG: Latvia and Hong Kong on Wednesday signed a double taxation avoidance agreement (DTAA), intended to attract foreign investment and facilitate investors’ operations in Latvia and Hong Kong, representatives of the Latvian Finance Ministry informed BC.
The DTAA between Latvia and the Hong Kong Special Administrative Region was signed by Latvian Finance Minister Dana Reizniece-Ozola (Greens/Farmers) and Hong Kong’s Secretary for Financial Services and the Treasury Chan Ka-keung.
“The agreement is highly significant to both Latvia and Hong Kong because it opens up more opportunities to investors of both sides. When planning investments in a particular country it is important to project their yield and profitability. A stable taxation regime that is not affected by amendments to the other country’s tax laws will provide the necessary predictability and stimulus for the attraction of investors. It is also important that the agreement creates a legal basis for information exchange between the Latvian and Hong Kong’s tax authorities on the income earned by both sides’ taxpayers, thus reducing tax evasion possibilities,” Reizniece-Ozola said.
At present, investors from Latvia and Hong Kong have to pay taxes in the other country in accordance with national tax legislation, and each side can change its tax rates and taxation rules, which makes investment planning more complicated. The DTAA is expected to change this situation.
