UK and International Tax news

UK – Hong Kong Double Tax Agreement

Tuesday 22nd June 2010

A first-time comprehensive Double Taxation Agreement between the UK and the Hong Kong Special Administrative Region of the People’s Republic of China was signed in London on 21 June 2010 by David Gauke MP, Exchequer Secretary to the Treasury and Professor K.C. Chan, Hong Kong Secretary of Financial Services and the Treasury.

The Agreement generally follows the OECD Model Double Taxation Convention. Important features include:

  • the latest OECD provision on exchange of information, but limited to taxes covered by the Agreement,
  • 0% withholding tax on dividends (except for REITs) and 3% on royalties,
  • 0% withholding tax on interest but with a provision to ensure the benefits of the interest article can only flow to residents of the other state.

The text of the new Agreement has been made available on HMRCs website and will be published by the Stationery Office as soon as it is presented to Parliament for approval.

The Agreement enters into force once both countries have completed their legislative procedures. The provisions of the Agreement will then take effect from the next calendar year.

If you would like further information on the above, please contact Keith Rushen on +44 (0)20 7486 2378

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