Hong Kong and Qatar sign tax treaty

The Secretary for Financial Services and the Treasury, Professor K C Chan, signed an agreement with the Ambassador Extraordinary and Plenipotentiary of the State of Qatar to China, Mr Hamad Bin Mohammed AL-Khalifa for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income on 13 May 2013. This is the 29th comprehensive agreement for the avoidance of double taxation ("CDTA") concluded by Hong Kong with its trading partners.

The following countries have singed the CDTA with Hong Kong:

Belgium, Thailand, the Mainland of China, Luxembourg, Vietnam, Brunei, the Netherlands, Indonesia, Hungary, Kuwait, Austria, the United Kingdom, Ireland, Liechtenstein, France, Japan, New Zealand, Portugal, Spain, the Czech Republic, Switzerland, Malta, Jersey, Malaysia, Mexico, Canada, Italy and Guernsey.

Under the CDTA, residents of both parties enjoy various tax preferential treatments, for example:

1. The tax paid for income earned by Qatar residents in Hong Kong will be allowed as credit against tax payable in Qatar.
2. Hong Kong residents would be exempted from the withholding taxes on dividends and interest receiving from Qatar. The withholding tax rate on royalties will be reduced 5%.
3. Subject to certain conditions, capital gains on the disposal of shares in Qatar entity by Hong Kong resident investor will not be taxable in Qatar.

The above information was extracted from the press release of Hong Kong Inland Revenue Department. For more information, please visit the website: http://www.ird.gov.hk/eng/ppr/archives/13051301.htm.