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Hong Kong Ready To Apply Three Double Tax Pacts

Wednesday, December 6, 2017

Hong Kong has announced that its new double tax agreement with Belarus entered into force on November 30, following the recent entry into force also of new deals with Pakistan and Latvia.

The CDTA with Belarus was signed in January 2017. It came into force on November 30, 2017, after the completion of ratification procedures on both sides and will be in effect in Hong Kong for any year of assessment beginning on or after April 1, 2018.

The treaty caps withholding tax on dividends at source at five percent; withholding tax on interest income at source also at five percent; and caps witholding tax on royalties income at three percent for income from royalties for the use or the right to use aircraft; and five percent in all other cases. Exemptions apply for companies engaging in cross-border activities with a permanent establishment in the other territory under the terms stipulated in the treaty.

The CDTAs with Latvia and Pakistan were signed in April 2016 and February 2017, respectively. The two CDTAs came into force on November 24, 2017, after the completion of ratification procedures. They will also be in effect in Hong Kong for any year of assessment beginning on or after April 1, 2018.