Double Tax Agreement Hong Kong New Zealand
Under the terms of the agreement, earnings transferred from a branch in Thailand to its headquarters in Hong Kong are exempt from the 10% withholding tax in Thailand. The agreement will apply to the UNITED Kingdom from 1 April 2011 for corporation tax and from 6 April 2011 for income tax and capital gains tax. It will enter into force in Hong Kong on 1 April 2011. “The double taxation agreement with Hong Kong is one of 40 such tax treaties with our major trade and investment partners,” nash said. “They promote the growth of economic relations by removing tax barriers to cross-border trade and investment.” “Hong Kong is a major international financial centre, and if it were not included as an AEOI exchange partner, it would leave a significant gap in our tax compliance network. We are gradually expanding and updating our network of double taxation treaties to combat tax evasion,” says Nash. Under the terms of the agreement, Hong Kong residents who receive dividends from New Zealand that are not attributable to a permanent establishment in New Zealand will be subject to a reduced withholding tax rate of 15%. The withholding tax rate will be further reduced to 5% or 0% for eligible beneficial owners. Hong Kong residents who receive royalties from New Zealand pay a withholding tax limited to 5%. Methods of reducing double taxation are prescribed either by a country`s national tax legislation or by the specific DTA.
In general, there are four methods to reduce double taxation. Under Article 151 of the Basic Law, Hong Kong is free to have its own double taxation treaties independent of mainland China (i.e. the rest of the People`s Republic of China) using the abbreviation Hong Kong, China. The territory is not allowed to use double taxation treaties that China can conclude, as these treaties only mention taxes on the mainland. Mainland China will also not impose double taxation treaties in the territory, as it guarantees Hong Kong the right, under Articles 106 to 108 of the Basic Law, to maintain an independent tax system free from mainland interference until 2047. More information can be found here: taxpolicy.ird.govt.nz/tax-treaties/hong-kong The following information provides brief details on some important double taxation avoidance treaties signed by the Hong Kong Special Administrative Region. Regarding the new agreement, Donald Tsang announced the following: In August 2006, the Chinese and Hong Kong governments signed an agreement to avoid double taxation, which aims to give investors and taxpayers in both places certainty about tax liability and offer tax savings. Hong Kong`s network of tax treaties aims to remove the obstacle to double taxation of foreign investment by helping to structure transactions at minimal tax costs. The Agreement for the Avoidance of Double Taxation of Income and the Prevention of Tax Evasion extends the scope of the original Agreement on Business Profits and Income from Personal Services, which both parties signed in 1998. The legislation allows Hong Kong to conclude comprehensive DTAs containing the Organisation for Economic Co-operation and Development (OECD) international standard for the exchange of information.
Until June 2001, there were no comprehensive double taxation treaties in Hong Kong. Since then, however, the number of contracts has grown quite rapidly. “Double taxation treaties provide greater certainty in tax treatment, eliminate double taxation, reduce withholding taxes on cross-border investment returns, and exempt certain short-term activities from income tax. In addition, a double taxation agreement between Hong Kong and Saudi Arabia is currently pending. There is also a memorandum of understanding with China that states: In September 2012, the tax commissioner said Hong Kong had made “remarkable progress” in building its international network of tax treaties since the amendment of the Tax Ordinance in March 2010, and since then, Hong Kong`s tax treaty network has grown rapidly. As of March 2018, a total of 37 comprehensive double taxation treaties were in force in Hong Kong. “As part of this AEOI initiative, New Zealand financial institutions are required to review their accounts and compile information that is then shared with the tax authorities. The updated double taxation agreement will allow New Zealand`s first automatic exchange of information with Hong Kong until 30 September 2018. The updated deal lowered the withholding tax on Hong Kong residents receiving dividends from UK real estate investment trusts from 20% to 15%. In addition, the withholding tax for Hong Kong residents who receive royalties and interest from the UK is limited to 3% instead of the non-contractual rate of 20%.
The Hong Kong/UK CDTA replaces existing limited double taxation treaties to avoid airlines and for shipping revenues. In most contracts concluded by Hong Kong, double taxation is eliminated by the deduction of a tax credit. According to the agreement, Switzerland is exempt from double taxation. In addition, the withholding tax rate has been reduced to 10%. In November 2010, the Hong Kong/Luxembourg COMMISSION was updated to include the article on the exchange of information in order to bring the agreement into line with the international standard of the Organisation for Economic Co-operation and Development. In June 2001, Hong Kong concluded a limited shipping agreement with the United Kingdom. The Agreement is limited to revenues from international shipping and provides that profits from such transactions of a United Kingdom or SAR company are exempt from tax in the territory of the other Party. With its entry into force on 3 May 2001, the provisions of the Agreement applied to the United Kingdom from 1 April 2002 to corporation tax and from 6 April 2002 to income tax and capital gains tax. It applied to the RAD from 1 April 2002. The agreement was also the first Hong Kong DTA to be signed using the Organisation for Economic Co-operation and Development standard on the exchange of tax information. Prior to the December 2003 Agreement, royalties collected by a Hong Kong resident from a Belgian source not attributable to a permanent establishment in Belgium were subject to a Belgian withholding tax of 15 per cent on the gross amount of royalties less a fixed deduction of 15 per cent. Under the agreement, the Belgian withholding tax was reduced to 5% of the gross amount of the royalties (without the fixed deduction of 15%).
In the case of interest received by a Hong Kong resident arising in Belgium and not attributable to a permanent establishment in Belgium, the Belgian withholding tax was reduced from 15 % of the gross interest to 10 % under the agreement. .