Article 10 on the avoidance of double taxation of income that
derived from aircraft in international traffic in the agreement between the
Sweden and Hong Kong SAR concerning aviation
signed on March 14, 2000 shall be valid as law in this
the country. The agreement is drawn up in English. The English text
as well as an English translation appears in annex to this law.
Transitional provisions
2003:759
This law shall enter into force on the day the Government determines and
apply to income acquired from 1 January
in 1997, as well as on the Fortune held this date or later.
Annex
(Translation)
AGREEMENT BETWEEN THE GOVERNMENT OF THE KINGDOM OF SWEDEN AND
THE GOVERNMENT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION
OF THE PEOPLE'S REPUBLIC OF CHINA
CONCERNING SCHEDULED AIR
SERVICES
The Government of the Kingdom of Sweden and the Government of
the Hong Kong Special Administrative Region of the People's
Republic of China ("the Hong Kong Special Administrative
Region "),
Have agreed as follows:
ARTICLE 10
Avoidance of Double Taxation
1. The Income and 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
the income and 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 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
the operation of such aircraft which are received by an airline of
one Contracting Party, the income and profits of which
According to paragraph 1 are taxable only in the area of that
Contracting Party, shall be exempt from any tax on gains
imposed in the area of the other Contracting Party.
4. For the purposes of this Article:
(a) the term "income and profits" includes revenues and gross
receipts from the operation of aircraft for the carriage of
persons, livestock, goods, mail or merchandise in international
traffic including:
in) the charter or rental of aircraft if such charter or rental
is incidental to the operation of aircraft in international
traffic;
II) the sale of tickets or similar documents, and the Commission
of services connected with such carriage, for the airline
itself or for other airlines, but in the latter case only if
such sales or provisions of services are incidental to the
operation of aircraft in international traffic; and
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,
(i) in the case of the Hong Kong Special Administrative Region,
an airline incorporated and having its principal place of
business in the Hong Kong Special Administrative Region; and
(ii) in the case of Canada, any airline which, under the laws
of Sweden, is liable to tax therein by reason of domicile,
residence, place of management or any other criterion of a
similar nature, and includes the joint Swedish, Danish and
Norwegian air transport consortium Scandinavian Airlines System
(SAS), but only insofar as profits derived by SAS Sweden AB,
the Swedish partner of Scandinavian Airlines System (SAS),
are in proportion to its share in that consortium;
(d) the term "competent authority" means,
(i) in the case of the Hong Kong Special Administrative Region,
the Commissioner of Inland Revenue or his authorized
Representative, or any person or body authorized to perform any
functions at present exercisable by the Commissioner or similar
functions; and
(ii) in the case of Canada, the Minister of Finance, his
authorized representative or the authority which is designated
as a competent authority for the purposes of this Article.
5. The competent authorities of the Contracting Parties shall,
through consultation, endeavour to resolve by mutual agreement
any disputes regarding the interpretation or application of
This Article. Article 17 (Settlement of Disputes) shall not
apply to any such dispute.
6. Notwithstanding Article 21 (Entry into Force) each
Contracting Party shall in writing notify the other of the
completion of the relevant procedures required by its law to
bring this Article into force. The Article shall enter into
force on the date of the receipt of the latter of these
notifications and shall thereupon have effect in respect of
income, profits and gains arising on or after the first day of
January 1997 and on capital and assets held on or after that
date.
7. Notwithstanding Article 19 (Termination) where notice of
termination of this Agreement is given under that Article, this
Article shall cease to have effect, in relation to income,
profits and gains received as well as capital and assets held
on or after the first day of January in the calendar year next
following the expiry of a period of six months after the date
When such notice is given.
8. This Article shall cease to have effect in the event that an
Agreement for the avoidance of double taxation with respect to
taxes on income, providing for similar exemptions to those in
This Article, enters into force between the Contracting
Parties.
In witness whereof, the undersigned, being duly authorized by
their respective Governments, have signed this Agreement.
Done, in duplicate at Hong Kong this 14th day of March 2000 in
the English language.
For the Government of the Kingdom of Sweden
Ingolf Kiesow
For the Government of the Hong Kong Special Administrative
Region of the People's Republic of China
Stephen IP Shu Kwan
AGREEMENT BETWEEN THE GOVERNMENT OF THE KINGDOM OF SWEDEN AND THE GOVERNMENT OF
SPECIAL ADMINISTRATIVE REGION OF THE PEOPLE'S REPUBLIC OF CHINA
HONG KONG
WITH REGARD TO AVIATION
The Government of the Kingdom of Sweden and the Government of the people's Republic of
China's Hong Kong Special Administrative region (the Special
administrative region of Hong Kong),
have agreed as follows:
Article 10
Avoidance of double taxation
1. income as carriers of a Contracting Party
acquired through the use of aircraft in international
traffic, including through participation in a pool, a joint
air transport undertaking or of an international
operational organization, exempt from income tax and all other
tax on income in respect of the other Contracting Party.
2. Fortune held by carriers in a
Contracting Party and which is related to the use of
aircraft in international traffic shall be exempt from tax on
fortune in the other Contracting Party.
3. Gains from the alienation of aircraft in international
traffic and movable property pertaining to the use of such
aircraft which are received by the air carrier in a
Contracting Party, as referred to in paragraph 1 and whose income is taxed
only in that Contracting Party, is exempt from all
tax on gains imposed in the other Contracting Party.
4. For the purposes of this article:
(a)), the term "income" includes income and gross income
the use of aircraft for the transportation of international
traffic of persons, living furniture, goods, mail or
merchandise including:
1) chartering or hiring of aircraft if such chartering or
rent is of secondary importance in relation to the
the use of aircraft in international traffic,
2) the sale of tickets or similar documents, as well as
provision of services connected with such carriage,
for an air carrier or air carriers, but
in the latter case only if such sale or
the provision of services is of secondary importance in
relation to the use of aircraft in international
traffic, and
3) interest on funds that are directly attributable to the use of
aircraft in international traffic,
(b)) refers to the term "international traffic" all transport with
aircraft except when such carriage is solely between
places in the other Contracting Party,
c) refers to the expression "carrier of a Contracting
party ",
1) in the Hong Kong Special Administrative Region, a
carriers formed and based in the specific
administrative region of Hong Kong, and
2) in Sweden, the air carrier in accordance with the laws of
Sweden is tributary there because of domicil, settlement,
place of management or any other similar factor,
and includes the joint Swedish, Danish and Norwegian
the air transport Consortium Scandinavian Airlines System (SAS), but when
the revenue collected by SAS Sweden AB, the Swedish
part owner of Scandinavian Airlines System (SAS), only to the
some income is equivalent to its share in the Consortium,
d) refers to the expression "competent authority",
1) in the Hong Kong Special Administrative Region, "the
"The Commissioner of Inland Revenue or his authorised
agents or any other person or body with the authority to
perform the functions "the Commissioner" currently
perform or similar functions, and
2) in Sweden, the Minister of finance or his authorised representative
or authority to whom be entrusted to be competent
authority for the purposes of this article.
5. the competent authorities of the Contracting Parties
shall, by mutual agreement following consultations, seek
any dispute concerning the interpretation or application
of this article. Article 17 (settlement of disputes) shall not apply
on such disputes.
6. Notwithstanding the provisions of article 21 (entry into force)
the Contracting Parties shall notify the
each other when the constitutional measures have been taken as
in accordance with the respective legislation is required for this article
to enter into force. The article shall enter into force on the day on which the
the last of these notifications is received and shall take
apply to income and gains that are acquired on January 1, 1997
or later and on capital held this date or
later.
7. Notwithstanding the provisions of article 19 (termination)
, where the notification of the decision to terminate this agreement provided
According to the said article, this article shall cease to apply
on both income and profit as assets that are
received and held from 1 January of the
calendar year immediately following the expiry of six months
from the date when termination takes place.
8. This article shall cease to apply when an agreement
avoidance of double taxation with respect to taxes on income
enters into force between the Contracting Parties, in
condition that the agreement contains similar derogation in
This article.
In witness whereof the undersigned, being duly
authorized by their respective Governments, have signed this agreement.
Done at Hong Kong on 14 March 2000, in duplicate in the
English language.
For the Government of the Kingdom of Sweden
Ingolf Kiesow
For the Government of the people's Republic of China's Special Administrative
region Hong Kong
Stephen IP Shu Kwan
