Hong Kong – Netherlands Double Tax Treaty
Hong Kong – Netherlands Double Tax Treaty
Updated on Thursday 19th January 2017 Rate this article
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Benefits of the Hong Kong – Netherlands double tax treaty
The foremost advantage of the Hong Kong – Netherlands double tax treaty is that it enables investments from Hong Kong, together with indirect Chinese investments, to be effectuated in a way in which the profits can be sent back to Hong Kong without having to pay any withholding tax.
Other benefits of the Hong Kong – Netherlands double tax treaty include:
• The Netherlands does not impose a withholding tax on royalties and interest, however it does levy a 15% dividend tax if a double taxation agreement is not signed, with certain exemptions. Our Hong Kong law firm can provide more details on what this exemption may consist of;
• The local tax system in Hong Kong does not levy a tax on interest and dividends, however it does apply one on royalties gained by a resident of Hong Kong.
Dividends according to the Hong Kong – Netherlands double tax treaty
A tax rate of 0%, replacing the existing 15% one which applies in the Netherlands, is placed on dividends earned by businesses which own at least 10% of the share capital of the issuing company.
To qualify for the 0% rate, one of the following requirements have to be met:
1. The shares of the business that earns the dividend have to be traded on a regular basis on an accepted stock exchange; or
2. Minimum 50% of the earning company shares is owned by a business with shares being traded on an accepted stock exchange.
If you need to know more details about the provisions of the Hong Kong – Netherlands double tax agreement, please contact our attorneys in Hong Kong.