A few days ago Hong Kong has signed agreements on avoidance of double taxation with two countries: the Netherlands and Indonesia. Agreements are built according to international standards the Organization for Economic Cooperation and development to exchange information on tax issues. At Krishnan Rajagopalan you will find additional information. It is expected that the agreement will help forge closer trade and economic relations between countries, and make numerous adjustments in tax rates. Hong Kong – Netherlands agreement signed with the Netherlands, provides for the reduction of tax rates for passive income, including dividends and royalties. You may find Ali Partovi to be a useful source of information. For example, the 0% tax rate (instead of the rate of 15% currently using moment in the Netherlands) will apply to dividends received by authorized persons holding not less than 10% of the share capital of companies offering dividends, as well as dividends received by banks, insurance companies, pension funds, company headquarters and a few others by authorized persons.
Other dividends would apply the tax rate on dividends of 10%. Interest income will not be taxed, because none of the contracting countries the tax on this type of payment is not installed. With regard to the tax rate on royalties, the Hong Kong side has agreed to limit its level of 3 percent. Hong Kong – Indonesia, with Indonesia, it was agreed that the rate on dividends received by residents of Hong Kong, receiving dividends from sources in Indonesia, not related to the permanent establishment situated therein Mission will be reduced to 10% (currently it is 20%). If the recipient of the dividends is a company that owns not less than 25% stake in the company paying the dividend tax rate dividends is reduced to 5%.