South Africa Hong Kong Double Tax Agreement
A double taxation agreement allows the tax paid to be deducted from the tax paid in one country with the taxes payable in the other country, thus avoiding double taxation. South Africa is a signatory to double taxation agreements with several countries around the world. Some types of income are tax-exempt or entitled to reduced rates. These include royalties, dividends and capital gains. Under the agreement, Hong Kong residents who receive dividends from New Zealand that are not attributable to an institution in New Zealand are subject to a reduced withholding rate of 15%. The withholding rate is further lowered to 5% or 0% for eligible beneficiaries. Hong Kongers who receive royalties from New Zealand pay a withholding tax capped at 5%. With regard to the new agreement, Donald Tsang announced that the agreement to avoid double taxation of income and the prevention of tax evasion broadened the scope of the original agreement on profits and income from human services, which both parties signed in 1998. The agreement applies in the United Kingdom from 1 April 2011 for corporation tax and from 6 April 2011 for income and capital gains tax.
It applies from April 1, 2011 in Hong Kong. Under Article 151 of the Basic Law, Hong Kong is free to negotiate its own double taxation conventions independently of mainland China (i.e..dem the rest of the People`s Republic of China), using the acronym Hong Kong, China. The territory cannot resort to double taxation agreements that China can enter into, as these treaties only mention taxes on the continent. Mainland China will also not impose double taxation conventions on the territory, since under Articles 106 to 108 of Hong Kong`s Basic Law, it guaranteed the right to maintain an independent tax system without continental interference until 2047. In November 2010, the DBA Hong Kong/Luxembourg was updated to open the exchange of information to ensure that the agreement complies with international standards of the Organisation for Economic Co-operation and Development. Global agreements to avoid double taxation have been concluded between Hong Kong and the following countries (with effective dates): in addition, the DBA, Hong Kong airlines flying to Brunei, is taxed at the Hong Kong corporate tax rate (which is lower than Brunei`s). Profits from international shipping made by Hong Kong residents but made in Brunei, which are currently taxable in Brunei, will be tax-exempt under the agreement. When a corporation is established in both contracting parties, its domicile, within the meaning of the tax treaty, is where its effective administration is headquartered.