Interpretation of Double Taxation Agreements in Hong Kong

This article first discusses the relevant rules of interpretation on double taxation agreements with special emphasis on the new arrangement between the Mainland and Hong Kong. It then examines the legal status of the Commentaries to the Model Tax Conventions of the Organisation for Economic Co-operation and Development and the United Nations. It also examines the legal status of the Inland Revenue Department's new practice note on the double taxation arrangement between the Mainland and Hong Kong. This article then goes on to analyse the interaction between the Commentaries and the practice note. In interpreting the double taxation arrangement between the Mainland and Hong Kong, should tax practitioners follow the Commentaries or the practice note when a discrepancy occurs? Lastly, this article offers recommendations on resolving the uncertainties and complexities in the area of double taxation agreement interpretation.