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These notes are issued for the information of taxpayers and their tax - page 51 / 68





51 / 68

only in the Mainland. If a Hong Kong resident is employed by the Central People’s Government to work in the Hong Kong office, his income shall be taxable only in Hong Kong.


Paragraph 2 of Article 18 applies to pensions and its taxation

principle is the same as that laid in paragraph 1. The expression “or paid out of funds created or contributed as employer” in sub-paragraph (1) makes it clear that pensions include the pensions directly paid by the Government of One Side or a local authority thereof and the pensions paid out of funds created or contributed as employer by the Government of One Side or a local authority thereof. Sub-paragraph (2) provides for cases which are exceptions to those covered by sub-paragraph (1), which is the situation covered in sub-paragraph

  • (2)

    of paragraph 1, as stated in the foregoing paragraph 121 above.

  • 124.

    Paragraph 3 of Article 18 states clearly that paragraphs 1 and 2 do

not apply if the services are rendered in connection with a business carried on by the Government of One Side or a local authority thereof. In such cases the ordinary rules apply: Article 14 (Income from Employment) for salaries and wages; Article 15 (Directors’ Fees) for directors’ fees and other similar payments; Article 16 (Artistes and Sportspersons) for income derived by artistes and sportspersons; and Article 17 (Pensions) for pensions and other similar remuneration.

Article 19



Article 19 gives limited tax exemption to students so as to assist and

nurture talents as well as to take care of students’ living expenses. The Article provides that “payments which a student who is or was immediately before visiting One Side a resident of the Other Side and who is present in the One Side solely for the purpose of his education receives for the purpose of his

maintenance and education shall not be taxed such payments arise from sources outside payments include tuition fees, student grants

in that One Side, that One Side.” and scholarships

provided that Qualifying from sources

outside that One Side.


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