Airlines of one Contracting Party may get exemption from certain taxes in the other Contracting Party for qualifying aircraft-operation income and for related capital and assets, unless another similar double-taxation agreement is already in force.
Specification of Arrangements (Government of the Federal Republic of Germany Concerning Air Services) (Double Taxation) Order(Cap. 112, section 49)(Enacting provision omitted—E.R. 3 of 2020)[24 October 1997](Format changes—E.R. 3 of 2020) 1. Declaration under section 49 For the purposes of section 49 of the Ordinance it is declared that the arrangements referred to in section 2 have been made with the Government of a territory outside Hong Kong with a view to affording relief from double taxation in relation to income tax and any tax of a similar character imposed by the laws of that territory, and that it is expedient that those arrangements should have effect. 2. Arrangements specified The arrangements mentioned in section 1 are in Article 8A of the Agreement made between the Government of Hong Kong and the Government of the Federal Republic of Germany, in Hong Kong, on 5 May 1995 concerning Air Services (the Agreement), as amended by the Agreed Amendment to the Agreement made between the two Governments on 8 May 1997 as specified in the Schedule and having effect according to the tenor of that Agreement and the Agreed Amendment. Schedule [s. 2] Article 8A of the Agreement between the Government of Hong Kong and the Government of the Federal Republic of Germany Concerning Air Services Made in Hong Kong on the 5th day of May 1995, as amended by the Agreed Amendment to the Agreement made on 8 May 1997. “ARTICLE 8A Avoidance of Double Taxation (1) Revenues, gross receipts, income or profits derived from the operation of aircraft in international traffic by an airline of one Contracting Party, including participation in a pool service, a joint air transport operation or an international operating agency, which are subject to tax in the area of that Contracting Party shall be exempt from income tax, profits tax and all other taxes on revenues, receipts, income or profits imposed in the area of the other Contracting Party.(2) Capital and assets of an airline of one Contracting Party relating to the operation of aircraft in international traffic shall be exempt from all taxes on capital and assets imposed in the area of the other Contracting Party.(3) Gains from the alienation of aircraft operated in international traffic and movable property pertaining to the operation of such aircraft which are received by an airline of one Contracting Party shall be subject to tax only in the area of that Contracting Party.(4) For the purpose of this Article:(a) the term “revenues, gross receipts, income or profits derived from the operation of aircraft in international traffic” shall include revenues, gross receipts, income or profits from the operation of aircraft for the carriage of persons, livestock, goods, mail or merchandise including:(i) the lease of aircraft on a charter basis;(ii) the sale of tickets for and the provision of services connected with such carriage, either for the airline itself or for any other airline;(iii) interest on funds directly connected with the operation of aircraft in international traffic;(b) the term “international traffic” means any carriage by an aircraft except when such carriage is solely between places in the area of the other Contracting Party;(c) the term “airline of one Contracting Party” means an airline incorporated and having its principal place of business in the area of that Contracting Party.(5) This Article shall not have effect as long as an Agreement for the avoidance of double taxation with respect to taxes on income providing for similar exemptions shall be in force between the Contracting Parties.”.