According to Belta the Republic of Belarus and Hong Kong Special Administrative Region concluded Agreement for avoidance of double taxation and prevention of tax evasion on income and property taxes in Hong Kong on January 16, 2017.
As a rule states conclude such agreements when they hope on long-term cooperation and growth of trade turnover.
The Agreement covers the following taxes: withholding tax, tax on profit, personal income tax, real estate tax.
The following tax rates are established for:
- Royalties – 3 % (in the case of use or right of use of aircraft), 5 % (other cases). Belarusian tax rate for royalties is 15 %;
- Dividends – 5 %. Belarusian tax rate for dividends is 12 % for companies and 13 % for individuals;
- Interest – 5 %. Belarusian tax rate for interest is 10 % for companies and 13 % for individuals.
It’s worth to mention than the Agreement establish quite low tax rates. For example, the Agreement for avoidance of double taxation and prevention of tax evasion on income and property taxes between Belarus and China establishes tax on dividends payable which shall not exceed 10 %; tax rate on interests which shall not shall not exceed 10 % too. The same tax rate was set on royalties.
There are also special rules of formation of permanent establishment in the Agreement. A building site, construction, assembly facility or installation project or related oversight activities shall be deemed as a permanent establishment if it exists in a period of more than 12 months. Belarusian Tax Code sets that such site, project or activity is deemed a permanent establishment if it exists more than 180 days in any twelve month period.
In conclusion we’d like to say that this Agreement will contribute to increase bilateral economic relations and will help to attract investors from Hong Kong to Belarus.
The information is prepared using the materials of the official website of the Ministry of Taxes and Duties of the Republic of Belarus.