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Hong Kong Double Tax Treaty Network

Because of its Offshore Income Exemption, Hong Kong’s network of Double Tax Treaties (“DTA”) is less developed than  other Asian jurisdictions.
 
The purpose of the DTA’s is the elimination of double tax issues and the provision of reduced rates of withholding tax on dividends, interest and royalties. Most of Hong Kong’s DTAs are based on the OECD model, which determines the rights to tax different categories of income, allocated to each signatory country. In addition, most DTA’s contain exchange of information provisions, inspired from the OECD model.
 
To enjoy the benefit of Hong Kong’s DTA’s, a tax residence certificate issued by the tax authorities of the country where the recipient is a resident, must be submitted to the Hong Kong tax authorities. When the recipient is resident outside Hong Kong, the DTA’s provisions can be enjoyed without too many difficulties. However, when the recipient is a resident of Hong Kong, the Inland Revenue Department will not grant a tax residency certificate if the company’s income (or most of it) benefit from the Offshore Income Exemption. In such a case consideration should be given to structuring transactions.
 
As of January 2018, Hong Kong has entered into 38 DTAs, with the following countries:
 

  • Austria
  • Belarus
  • Belgium
  • Brunei
  • Canada
  • China
  • Czech Republic
  • France
  • Guernsey
  • Hungary
  • Indonesia
  • Ireland
  • Italy
  • Japan
  • Jersey
  • Kuwait
  • Latvia
  • Liechtenstein
  • Luxembourg
  • Malaysia
  • Malta
  • Mexico
  • Netherlands
  • New Zealand
  • Portugal
  • Pakistan
  • Qatar
  • Romania 
  • Russia
  • Saudi Arabia (ratification is pending)
  • South Africa
  • South Korea
  • Spain
  • Switzerland
  • Thailand
  • United Arab Emirates 
  • United Kingdom
  • Vietnam
 

February 2018

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