Govt endorses tax treaty between Estonia, Hong Kong

TALLINN - The Estonian government at a sitting on Thursday endorsed a treaty for the prevention of double taxation, tax evasion and fraud between the governments of the Republic of Estonia and the Hong Kong Special Administrative Region of the People's Republic of China.

The treaty for the prevention of double taxation aims to foster investments between Estonia and Hong Kong, government spokespeople said.

To meet its goal, the treaty limits income taxes that can be imposed by the state on the residents of the other partner state to the treaty, ensures equal treatment of residents of both states and eliminates double taxation. With the treaty, an obligation of bilateral information exchange is also established, which will create additional options for preventing tax fraud.

When the treaty has been signed, it also needs to ratified by the parliament as pursuant to the Constitution of the Republic of Estonia, tax issues must be established by law.

Estonia has valid tax treaties with a total of 59 states.