not the present intention of the Mainland to change the way it taxes profits derived from this type of operation. Nevertheless, the possibility that in future profits attributable to the permanent establishment may be taxed in accordance with the Comprehensive Arrangement cannot be ruled out.
EFFECTIVE DATES AND APPLICABLE TEXT
The Comprehensive Arrangement entered into force on 8 December
In the Mainland, the provisions of the Comprehensive Arrangement
shall apply to income derived in taxable years beginning on or after 1 January 2007; and in Hong Kong, in years of assessment beginning on or after 1 April 2007. The exchange letters became effective on 11 September 2007 that was the date of signature and the Second Protocol became effective on 11 June 2008.
A Hong Kong enterprise may adopt the end date of a year of
assessment as its accounting date, i.e. 31 March, or any other date falling within that year of assessment. The “basis period” for the enterprise will be the year ending on the accounting date that falls within that year of assessment. The basis period for the year of assessment 2007/08 may therefore commence as early as 2 April 2006 (i.e. the period from 2 April 2006 to 1 April 2007 as the basis period for the year of assessment 2007/08). Income derived during that basis period will be dealt with in accordance with the provisions of the
In Hong Kong, since the policy of bilingual legislation is in place,
It stands to
both the English and the Chinese texts of the Comprehensive Arrangement are
between the Mainland and Comprehensive Arrangement
Kong on the