UK- Hong Kong Tax agreement
The Double Taxation Agreement (DTA) between the UK and the Hong Kong Special Administrative Region of the People’s Republic of China which was recently signed in London entered into force on 20 December 2010.
The DTA has been drafted along the lines of the OECD Model Double Taxation Convention. Some of the main features of the DTA include:
- The inclusion of the latest OECD provisions on exchange of information, but limited to taxes covered by the DTA.
- Zero rate of withholding tax on dividends (except for REITs) and 3% on royalties.
- Zero rate of 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.