Encouraging trade and investment  

The CDTA clearly establishes a division of taxation rights between Hong Kong and Mauritius, helping investors to better assess potential tax liability for cross-border transactions. In addition, to facilitate trade and investment, the CDTA also include provisions to reduce or eliminate applicable taxes on certain sources of income between the two jurisdictions.

Prevention of treaty abuse

The CDTA contains the following specific provisions against treaty abuse:

1. an introductory statement or preamble specifying that the CDTA is intended to eliminate double taxation without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance; and
2. the principal purpose test (PPT) provisions whereby the granting of tax benefits under the CDTA would be denied if it is reasonable to conclude, having regard to all relevant facts and circumstances, that obtaining the benefits was one of the principal purposes of any arrangement or transaction.