Foreign and Military Affairs
HK, Netherlands ink deal to avoid double taxation
(Xinhua)
Updated: 2010-03-23 10:38
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HONG KONG - A comprehensive agreement for avoidance of double taxation (CDTA) was signed between the Hong Kong Special Administrative Region (HKSAR) and the Kingdom of the Netherlands on Monday.
The CDTA, applying to taxes on income, will bring a withholding tax rate of zero percent to a certain group of qualified entities, while leaving others a withholding tax rate of 10 percent, much lower than the 15 percent rate currently applicable in the Netherlands.
The agreement also rules that no source taxation will apply to interest payments, as there is no withholding tax for such payments in either party.
Besides, Hong Kong has agreed to limit its withholding tax to 3 percent.
K. C. Chan, the Secretary of Financial Services and the Treasure of HKSAR and the Minister of Finance of the Netherlands De Jager signed the agreement on Monday.
"I am confident that the agreement will encourage greater flow of investment, technology, talent and expertise between us for the mutual benefit of both economies," said Chan.
He also mentioned that it is the first agreement Hong Kong concludes with an Organization for Economic Co-operation and Development (OECD) member country adopting the latest international standard on exchange of information.
De Jager said that the agreement will be a stepping stone towards further increasing mutual investments.
