Hong Kong Tax Newsflash

Hong Kong SAR (HK) signed a Comprehensive Double Tax Agreement (CDTA) with Bahrain on 3 March 2024.  Bahrain is one of the economies participating in the Belt and Road Initiative. This is the 49th CDTA concluded by HK.

Below is a comparison of the withholding tax rates applicable to dividends, interest and royalties, under the respective domestic tax law and the HK-Bahrain CDTA:

_{NB1: The 4.95% rate generally applies.  If the royalty is paid to an associated entity and the intellectual property has been owned by a person carrying on business in HK, 16.5% applies.  If the taxpayer is eligible for two-tiered tax rates, 2.475% (or 8.25% if higher rate) applies on the first HKD 2 million of assessable profits and 4.95% (or 16.5% if higher rate) on the remaining amount.}

The HK-Bahrain CDTA will come into force after the completion of ratification procedures by both jurisdictions.  The CDTA can be downloaded from this link.

Tax Newsflash is published for the clients and professionals of Deloitte Touche Tohmatsu. The contents are of a general nature only. Readers are advised to consult their tax advisors before acting on any information contained in this newsletter.

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