Belarus and Hong Kong Conclude DTA

On January 16, Hong Kong and Belarus signed a comprehensive agreement for the avoidance of double taxation (CDTA) to eliminate double taxation with respect to taxes on income and on capital.

Allocation of taxing rights

The CDTA sets out clearly the allocation of taxing rights between the two jurisdictions and will help investors better assess their potential tax liabilities from cross-border economic activities. Hong Kong's Inland Revenue Department said that the CDTA signifies the Government's sustained efforts in expanding Hong Kong's CDTA network, in particular with economies along the Belt and Road.

Double Taxation

The CDTA ensures that the profits of Hong Kong companies doing business through a permanent establishment in Belarus will not be taxed in both places if the income is Hong Kong sourced. Under the agreement, double taxation will be avoided in the way that any tax paid by companies in a foreign country will be allowed as a credit against the tax payable on the same profits in their home country.

Withholding Taxes

Belarus' withholding tax rate for Hong Kong residents on royalties (currently at 15 percent for companies and 13 percent for individuals) will be capped at 5 percent and will be further reduced to 3 percent if the royalties are for the use of, or the right to use, aircraft. Belarus' withholding tax rate for Hong Kong residents on dividends (currently at 12 percent for companies and 13 percent for individuals) and interest (currently at 10 percent for companies and 13 percent for individuals) will be capped at 5 percent.

The CDTA will come into force after the completion of ratification procedures on both sides.

Sources: Hong Kong Inland Revenue Department - Press Release, DTA
 

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