Hong Kong and Belgium have concluded an agreement for the avoidance of double taxation on income and on capital. This treaty offers a series of tax benefits that would not apply otherwise to investors who derive income from both jurisdictions.
The double tax treaty between Hong Kong and Belgium was among the first of this type to be signed by the Special Administrative Region and it is important in the context of economic cooperation and foreign investments.
Entrepreneurs who are interested in company registration in Hong Kong and have their main place of business based in Belgium should be well aware of the various tax benefits this treaty can offer.
Taxes covered by the Hong Kong – Belgium DTA
The double tax treaty (DTA) applies to all individuals and residents of one or both jurisdictions. The provisions of the agreement are valid for those taxes levied by the two Governments on income and on capital. In the case of Hong Kong, the taxes to which the treaty applies are the profits tax, the salaries tax, and the property tax.
In the case of Belgium, the double tax treaty applies to the corporate and individual income tax, the income tax on non-residents and other taxes like the income tax on legal entities. The double tax treaty also applies to any other taxes imposed in addition to or in place of the ones described.
Hong Kong adopted a low taxation regime that has several advantages for many investors who open a Hong Kong company. Our experts can help you with detailed information about the manner in which the corporate tax is levied in the Special Administrative Region.
Tax benefits under the DTA between Hong Kong and Belgium
The tax benefits that are accessible to foreign investors in Hong Kong who come from Belgium are best highlighted by the reduced withholding tax rate on dividends, interest ad royalties. The withholding tax for dividends can be reduced to 0% under the treaty (if certain conditions apply) or have a reduced rate of 5%, compared to the normal withholding tax rate of 15 or 25% that would apply without a comprehensive double taxation agreement.
Belgian resident companies also benefit from capped tax rates when they receive income through a permanent establishment based in Hong Kong or when they receive royalties from Hong Kong residents.
You can contact our company registration agents in Hong Kong for further information about how taxes are capped under the double tax treaty.