Hong Kong, Bangladesh enter into tax pact to boost economic ties
HONG KONG, Aug. 30 (Xinhua) -- China's Hong Kong Special Administrative Region (HKSAR) government on Wednesday signed a comprehensive avoidance of double taxation agreement (CDTA) with Bangladesh, a move conducive to economic and trade development for both sides.
The CDTA is the 47th agreement that Hong Kong has concluded, signifying the HKSAR government's sustained efforts in expanding Hong Kong's CDTA network. It sets out the allocation of taxing rights between the two jurisdictions and will help investors better assess their potential tax liabilities from cross-border economic activities.
Under the Hong Kong-Bangladesh CDTA, Hong Kong companies can enjoy double taxation relief in that any tax paid in Bangladesh, whether directly or by deduction, in accordance with the CDTA, will be allowed as a credit against the tax payable in Hong Kong in respect of the same income, subject to the provisions of the tax laws of Hong Kong.
Moreover, the Hong Kong-Bangladesh CDTA also provides the following tax relief arrangements: Bangladesh's withholding tax rates for Hong Kong residents on dividends will be capped at 10 percent or 15 percent (depending on the percentage of their shareholdings); and on interest, royalties and fees for technical services will be capped at 10 percent; and Hong Kong residents deriving profits from international shipping transport in Bangladesh will enjoy 50 percent tax reduction in Bangladesh in respect of the profits subject to tax there.
Christopher Hui, secretary for financial services and the treasury of the HKSAR government, said that this CDTA will further promote economic and trade ties between Hong Kong and Bangladesh, and offer additional incentives for the business sectors of both sides to do business or make investment.
This CDTA will come into force after the completion of ratification procedures by both jurisdictions.