Hong Kong has signed Comprehensive Double Taxation Agreements (“CDTAs”) with the United Kingdom and Ireland for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. So far in 2010, Hong Kong has signed eight agreements, which all adopt the 2004 OECD standard on the exchange of information. The two CDTAs, signed on June 21 and June 22 respectively, are the 12th and 13th agreements signed by the Hong Kong Special Administrative Region Government.
Withholding Tax Rates Under Hong Kong Treaties
|
Country
|
Dividends
|
Royalties
|
Interest
|
| Austria | Nil-10%(1) | 3% | Nil |
| Belgium |
5-15%(2)
|
5%
|
10%
|
| Brunei Darussalam |
Nil
|
5%
|
5-10%(3)
|
| Hungary |
5 – 10%(4)
|
5%
|
5%
|
| Indonesia |
5-10%(5)
|
5%
|
10%
|
| Ireland | 0 | 3% | 10-15%(6) |
| Kuwait |
0-5%(7)
|
5%
|
5%
|
| Luxembourg |
0-10%(8)
|
3%
|
Nil
|
| Mainland China |
5-10%(9)
|
7%
|
7%
|
| The Netherlands |
0-10%(10)
|
3%
|
Nil
|
| Thailand |
10%
|
5-10%(11)
|
10-15%(12)
|
| United Kingdom | 0-10%(13) | 3% | Nil |
| Vietnam |
10%
|
7-10%(14)
|
10%
|
| Explanatory notes | |
| Note (1) | 0% if the beneficial owner is a company that directly holds at least 10% of the capital of the company paying the dividends. In all other cases, 10%. |
| Note (2) | 5% if the beneficial owner is a company that directly holds at least 10% of the capital of the company paying the dividends. In all other cases, 15%. |
| Note (3) | 5% if the recipient is a bank or financial institution. In all other cases, 10%. |
| Note (4) | 5% if the beneficial owner is a company directly owning at least 10% of the capital of the company paying the dividends. In all other cases, 10%. |
| Note (5) | 5% if the beneficial owner is a company that directly owns at least 25% of the capital. In all other cases 10%. |
| Note (6) | 10% unless paid to HKMA, a body owned or funded by the Government of the HKSAR, a bank or financial institution, paid by a bank or a financial institution, paid in respect of a sale on credit or to a person providing pension benefits. |
| Note (7) | 0% if the beneficial owner is the government. In all other cases, 5%. |
| Note (8) | 0% if the beneficial owner is a company that directly owns at least 10% of the capital of the company paying the dividends or a participation with an acquisition cost of at least EUR1.2 million in the company paying the dividends. In all other cases, 10%. |
| Note (9) | 5% if the beneficial owner is a company that directly holds at least 25% of the capital of the company paying the dividends. In all other cases, 10%. |
| Note (10) | 0% if the beneficial owner is a company directly owning at least 10% of the capital of the company paying the dividends, provided that:
In all other cases, 10%. |
| Note (11) | 5% if for the use of, or for the right to use, any copyright of literary, artistic or scientific work. 10% if for the use of, or for the right to use, any patent, trademark, design or model, plan, secret formula or process In all other cases, 15%. |
| Note (12) | 10% if the recipient is a financial institution or insurance company, or in respect of arm’s-length transactions concerning the sale of equipment, merchandise or services. In all other cases, 15%. |
| Note (13) | Except where the beneficial owner is a pension scheme dividends paid by property investment vehicles such as REITs will be subject to a withholding tax of 15%. |
| Note (14) | 7% if for the use of, or for the right to use, any patent, design or model, plan, secret formula or process. In all other cases, 10%. |
