Hong Kong Tax Newsflash

Hong Kong SAR (HK) signed a Comprehensive Double Tax Agreement (CDTA) with Croatia on 24 January 2024. This is the 48th 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-Croatia 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.

NB2: 10% for payments made to a non-resident company in general; 25% for payments made to entities that have their headquarters or place of effective management in a jurisdiction that is on the EU list of noncooperative jurisdictions for tax purposes.

NB3: 15% for payments made to a non-resident company in general; 25% for payments made to entities that have their headquarters or place of effective management in a jurisdiction that is on the EU list of noncooperative jurisdictions for tax purposes.

The HK-Croatia 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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Authors

Kiwi Fung
Tax Manager
+852 2258 6162
kifung@deloitte.com.hk

International and M&A Tax