PUTRAJAYA, April 25 (Bernama) -- Malaysia and Hong Kong Special Administrative Region (SAR) of the People's Republic of China today signed the Agreement on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (DTAA Malaysia-Hong Kong).

Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah signed for the Malaysian government and Hong Kong Financial Secretary John C. Tsang for SAR.

Prime Minister Datuk Seri Najib Tun Razak, who is also Finance Minister, witnessed the signing.

The Finance Ministry said this was the 74th DTAA concluded by Malaysia with its trading partners, including two restricted agreements with the US and and Argentina.

"The objective is mainly to avoid double taxation by allocating the taxing rights between the two places, grant reduction in withholding taxes on a reciprocal basis and provide tax certainties in connection with cross-border activities," it said in a statement.

Today's agreement will also allow Malaysia and Hong Kong tax authorities to exchange taxpayers' information to prevent income tax avoidance and evasion.

The DTAA Malaysia-Hong Kong will come into force after both sides completed the ratification procedures.