Hong Kong China Double Tax Agreement
If it is not possible to reach a mutual agreement, these individuals are not entitled to tax benefits granted under the DBA. This broadens the test for determining a person`s tax residence, which until now has only been considered an effective place of management. In October 2019, the state tax authority also issued ad 31 (as a „treatment of non-resident taxpayers benefiting from double taxation agreements“). Market Notice 35 indicated that relevant documents relating to income tax agreements would be retained by taxpayers (rather than subject to tax authorities). Announcement 35 simplified reporting obligations for policyholders or deferential officers. The updated contract reduced the withholding tax from 20% to 15% for Hong Kong residents who received dividends from uk real estate investment trusts. In addition, withholding tax is limited to 3% for Hong Kong residents who collect royalties and interest from the United Kingdom, instead of the non-contract rate of 20%. The Hong Kong CDTA in the United Kingdom replaces existing limited double taxation agreements for airline revenues and shipping revenues. Under Article 151 of the Basic Law, Hong Kong is free to negotiate its own double taxation conventions independently of mainland China (i.e..dem the rest of the People`s Republic of China), using the acronym Hong Kong, China.
The territory cannot resort to double taxation agreements that China can enter into, as these treaties only mention taxes on the continent. Mainland China will also not impose double taxation conventions on the territory, since under Articles 106 to 108 of Hong Kong`s Basic Law, it guaranteed the right to maintain an independent tax system without continental interference until 2047. The following information provides succinct details on some important double tax evasion agreements signed by SADA Hong Kong. „The conclusion of a comprehensive double taxation agreement with the continent, as well as the closer economic partnership agreement on the mainland and in Hong Kong, will further encourage international investors to enter the continental market via Hong Kong. In addition, cross-border financing agreements and the transfer of technical know-how and patents between the two sites will be improved. These will help stimulate Hong Kong`s economy, strengthen our competitiveness and attract foreign capital. Prior to the December 2003 agreement, royalties granted by a Hong Kong resident from a Belgian source that was not attributable to any stable establishment in Belgium were subject to a Belgian withholding tax of 15% on the gross amount of royalties, net of a fixed deduction of 15%. Under the agreement, the Belgian withholding tax was set at 5% of the gross amount of royalties (excluding the 15% vat deduction).
Drop. With regard to interest received by a Hong Kong resident residing in Belgium, which is not attributable to a stable establishment in Belgium, the Belgian withholding tax has been reduced from 15% of the gross rate to 10% under the agreement. In August 2006, the Chinese and Hong Kong authorities signed an agreement to avoid double taxation, which aims to guarantee tax debt and tax savings to investors and taxpayers in both localities. The Fifth Protocol introduces a new Tiebreaker rule for a person`s double stay (defined by the DBA as an individual, a company, a trust, a partnership or other groups). If a person other than a person is established in both jurisdictions, the territorial authority of both parties (China State Taxation Administration and Hong Kong Inland Revenue Department) must agree on the place of residence, taking into account the place of effective administration, place of creation and other relevant factors. China Briefing is written and produced by Dezan Shira – Associates. The practice supports foreign investors in China and has since 1992 by offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen and Hong Kong.