and any other China-source passive income unless reduced under a tax treaty. 2002, Agreement on the Host Country of the Secretariat between the People's Republic of China and the Shanghai Cooperation Organisation, Tashkent, 17.6.2004, Convention on the Privileges and Immunities of the Shanghai Cooperation Organisation, Tashkent, 17.6.2004, Agreement Establishing the Multilateral Investment Fund II, Okinawa, 9.4.2005 (Inter-American Development Bank), Agreement on the Establishment of the ITER International Fusion Energy Organization for the Joint Implementation of the ITER Project, Paris, 21.11.2006, Agreement on the Privileges and Immunities of the ITER International Fusion Energy Organization for the Joint Implementation of the ITER Project, Paris, 21.11.2006, Agreement for the Establishment of the International Anti-Corruption Academy as an International Organisation, Vienna, 2.9.2010, Agreement on the New Development Bank, Fortaleza, 15.7.2014, Agreement establishing ASEAN + 3 Macroeconomic Research Office, Washington, 10.10.2014, Articles of Agreement of the Asian Infrastructure Investment Bank, Beijing, 29.6.2015, Agreement Concerning the Establishing of Global Technical Regulations for Wheeled Vehicles, Equipment and Parts which Can be Fitted and/or be Used on Wheeled Vehicles, Geneva, 25.6.1998, Intergovernmental Agreement on the Trans-Asian Railway Network, Busan, 10.11.2006, Convention for the Protection of Submarine Cables, Paris, 14.3.1884, as amended in 1886 and Final Protocol Thereto, Paris, 7.7.1887, International Agreement on the Use of INMARSAT Ship Earth Stations within the Territorial Sea and Ports, London, 16.10.1985, International Convention Against Doping in Sport, Paris, 19.10.2005, Agreement on Education Cooperation among Members of the Shanghai Cooperation Organisation, Shanghai, 15.6.2006, Asia-Pacific Regional Convention on the Recognition of Qualifications in Higher Education, Tokyo, 26.11.2011, Investment Promotion and Protection Agreements/Investment Agreements (IPPAs), Surrender of Fugitive Offenders Agreements, Exchange of Information Relating to Taxes Agreements, Agreement on Co-operation and Mutual Administrative Assistance in Customs Matters with the European Community, Agreement on Co-operation in Information Technology and Communications with Israel, agreements and arrangements for establishment/maintenance of offices or operation of international organisations in Hong Kong, Mutual Legal Assistance Agreements (MLAs), Surrender of Fugitive Offenders Agreements (SFOs), Transfer of Sentenced Persons Agreements (TSPs), Double Taxation Avoidance Agreements (DTAs), Exchange of Information Relating to Taxes Agreements (TIEAs), Agreements and Arrangements for establishment/maintenance of offices or operation of International Organisations in Hong Kong, Arrangements with the Mainland and the Macao SAR. Generally, once these institutions obtain a Form W-8 from a non-US person, the institution knows it does not have to report information about that particular customers account pursuant to FATCA. Analytical cookies help us enhance our website by collecting information on its usage. Our clients long-term sustainable development and growth is our top priority. On 30 November 2018, the income tax treaty between Hong Kong and India (the Treaty), signed on 19 March 2018, entered into force. The first negative factor has been amended to consider whether the investor (i.e., the DTA relief claimant) has an obligation to pay or distribute more than 50% of the dividend to a person who is resident in a third country (region) within 12 months after receiving the Chinese-sourced dividend. The tax law provides that the amount of tax credit granted must not exceed the amount that would be granted had all foreign tax minimization steps been taken. These foreign financial institutions would request W-8 series forms to identify and document their non-US account holders, which is why they request the form to non-US persons to complete. US persons are not required to complete the W-8 series form, but instead Form W-9 Request for Taxpayer Identification Number and Certification. EY US Tax News Update Master Agreement | EY Privacy Statement. Most of the treaties on our list applied to Hong Kong prior to 1 July 1997 (the date of Hong Kong's reunification with the Mainland) and continue to apply from that date. And Article 133 deals with the negotiation and conclusion of air services agreements. Comprehensive Double Taxation Agreements. We provide a comprehensive and flexible range of services to our clients, specialising in audit, accountancy, advisory, tax and legal services. 147), Working Environment (Air Pollution, Noise and Vibration) Convention, Geneva, 20.6.1977 (ILC No. In Chapter VII, Article 151 of the Basic Law provides that the Hong Kong SAR, using the name "Hong Kong, China" may maintain and develop relations and conclude and implement agreements on its own, with foreign states and regions and international organisations, in such matters as economic affairs, trade, finance and monetary affairs, shipping, communications, tourism, culture and sports. 108), Radiation Protection Convention, Geneva, 22.6.1960 (ILC No. Hong Kong has entered into Comprehensive Double Taxation Agreements / Arrangements (DTAs) with a number of jurisdictions. The general principle is that all treaties that have been applied to Hong Kong or Macao may continue to apply unless any of them have been expressly excluded and that any treaty concluded, or to be concluded, by China should apply to Hong Kong and Macao as deemed appropriate by China after consultation with Hong Kong and Macao respectively. A notional distinction may be drawn between -, (a) ASAs, IPPAs, TSPs, FTAs, ECAs, Labour Cooperation Arrangements and Agreements on Agriculture; and. In force. 148), Labour Administration Convention, Geneva, 26.6.1978 (ILC No. International Law Division Hong Kong has adopted the following MLI provisions relating to Acton 6: To modify the preamble text of Hong Kong's income tax treaties to: (1) specify that the treaties are not intended to create opportunities for non-taxation or reduced taxation through tax evasion or avoidance; and (2) refer to the desire of the Contracting Parties to . Privacy | IRC Section 7701 defines who is a US person or non US person. 3), Unemployment Indemnity (Shipwreck) Convention, Genoa, 9.7.1920 (ILC No. These forms are NOT sent directly to the IRS. Announcement 9 defines obligation to pay to include both agreed obligations and situations where there are no agreed obligations but the income is actually paid by the DTA relief claimant to its shareholders or other parties resident in a third country (region). KPMG International entities provide no services to clients. BCR | The synthesised text of the Hong Kong/Japan DTA as modified by the MLI published by the Japanese government can be accessed via this link: Vietnam has not yet deposited the MLI ratification document with the OECD as of 28 July 2022. For additional information with respect to this Alert, please contact the following: Ernst & Young Tax Services Limited, Hong Kong, Ernst & Young LLP (United States), Hong Kong Tax Desk, New York, Ernst & Young LLP (United States), Asia Pacific Business Group, New York. Italy has not yet deposited the MLI ratification document with the OECD as of 28 July 2022. Hong Kong: Five Benefits Of Using Hong Kong As A Gateway To The Chinese Market 27 May 2021 . , Gain access to personalized content based on your interests by signing up today. Where applicable, we have developed hyperlinks to external websites containing the texts of those treaties. Some of the files are in PDF format. The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The handling of external affairs of the Hong Kong SAR is elaborated upon in other Basic Law provisions in various chapters, in particular, Chapter VII "External Affairs". The changes to the Hong Kong DTAs shown in the table are based on the information produced by the OECDs MLI Matching Database and the English version of the synthesized text of the relevant Hong Kong DTAs published by the treaty partners (if any). Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions. Legal | Navigator platform seeks to join up customers across its network * Glossy advertising highlights international trade ambitions * UK customers seek post-Brexit support among first to benefit KPMG International provides no client services. Apart from the above agreements, visa abolition arrangements and agreements have been concluded with over 100 countries and territories, 10 of which were concluded by the Hong Kong SAR. 19 composite insurers (both general and long-term). 2023Copyright owned by one or more of the KPMG International entities. Copyright 1996 2023, Ernst & Young LLP. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. International Convention on Civil Liability for Bunker Oil Pollution Damage, London, 23.3.2001, International Air Services Transit Agreement, Chicago, 7.12.1944, International Convention on Certain Rules Concerning Civil Jurisdiction in Matters of Collision, Brussels, 10.5.1952, International Convention Relating to the Arrest of Sea-going Ships, Brussels, 10.5.1952, General Regulations of the Universal Postal Union, Beijing, 15.9.1999, Universal Postal Convention and Final Protocol, Beijing, 15.9.1999, Postal Payment Services Agreement, Beijing, 15.9.1999. The Foreign Account Tax Compliance Act (FATCA) is a 2010 US law requiring foreign financial institutions (FFIs) to review data for their account holders and identify all their US account holders or be subject to withholding on certain payments. Global Code of Conduct 1 Contents Investment basics 2 Overview of Hong Kong taxation 4 Taxation for businesses : profits tax 5 Compliance for profits tax 8 Withholding tax 9 Taxation for individuals : salaries tax 10 Compliance for salaries tax 13 Transfer pricing rules 14 Anti-avoidance rules 14 Other taxes / levies 15 Tax treaties 17 2 Investment basics The Central People's Government conclude agreements with a number of foreign governments, namely Australia, Cambodia, Canada, India, Italy, Japan, Republic of Korea, New Zealand, Philippines, Russian Federation, United Kingdom, United States of America and Vietnam concerning the functions, privileges and immunities of the latter's consular missions in the Hong Kong SAR. Private International Law (401 - 410) 5. 138), Rural Workers' Organisations Convention, Geneva, 23.6.1975 (ILC No. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP. Hong Kong applicants for the "same-treaty-benefit" rule under PN 91 are required to demonstrate sufficient economic nexus with Hong Kong. 142), Tripartite Consultation (International Labour Standards) Convention, Geneva, 21.6.1976 (ILC No. , 23.6.1975 ( ILC No texts of those treaties 108 ), Unemployment Indemnity ( Shipwreck Convention. Agreements / Arrangements ( DTAs ) with a Number of jurisdictions International Law ( 401 - 410 5... 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