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These notes are issued for the information of taxpayers and their tax - page 63 / 68

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of the Other Side, be subjected in the One Side to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which other similar enterprises of the One Side are or may be subjected.

Article 23

MUTUAL AGREEMENT PROCEDURE

144.

The Comprehensive Arrangement is a bilateral arrangement made

between the State Administration of Taxation and the Hong Kong Inland Revenue Department after consultation which allocates the right to tax between the two jurisdictions. It sets out mainly matters of principle. In the course of applying the Comprehensive Arrangement, it is possible that problems relating to the specific interpretation of the provisions and uncertainties may arise and need to be addressed. For this reason, Article 23 provides that the competent authorities of both Sides shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Comprehensive Arrangement, and may also consult together for the elimination of double taxation in cases not provided for in the Comprehensive Arrangement. For the purposes of reaching an agreement, representatives of the competent authorities of both Sides may meet and exchange their opinions verbally. Consultation in respect of the Comprehensive Arrangement shall be dealt with centrally between the State Administration of Taxation and the Hong Kong Inland Revenue Department, and not be conducted separately between the Hong Kong Inland Revenue Department and different local taxation authorities

of the Mainland.

145.

Paragraph 1 of Article 23 states clearly that where a person considers

that the actions of One Side or both Sides result or will result for him in taxation not in accordance with the provisions of the Comprehensive Arrangement, he may present his case to the competent authority of the Side of which he is a resident. The case must be presented within 3 years from the first notification of the action resulting in taxation not in accordance with the

provisions of the Comprehensive Arrangement.

146.

The competent authority receiving the claim shall endeavour, if the

objection appears to it to be justified, and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the

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