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Does China tax treaty apply to Hong Kong?

John Thompson

The U.S.-China income tax treaty does not apply to Hong Kong, Macau, or Taiwan.

Does US-China tax treaty include Hong Kong?

The “United States” does not include Puerto Rico, the Virgin Islands, Guam, or any U.S. territory or possession. The “People’s Republic of China” does not include Hong Kong, as Chinese tax laws are not in effect there.

Does HK pay tax to China?

In addition, under Article 106 of the Hong Kong Basic Law, Hong Kong has independent public finance, and no tax revenue is handed over to the Central Government in China. Taxes are collected through the Inland Revenue Department (IRD).

Is there withholding tax in Hong Kong?

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Hong Kong does not impose withholding tax on dividends, interests or rents. The only withholding tax is on any payment made to a non-resident for the use of, or the right to use, certain intellectual property in Hong Kong, or outside Hong Kong where the payments are deductible for the taxpayer.

Are dividends taxed in Hong Kong?

👉 Discover more in this in-depth guide.

Dividend income, whether from Hong Kong or overseas, is not taxable. Dividends paid to either a resident or non-resident of Hong Kong are not subject to any withholding tax.

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Why Hong Kong has no tax?

There are no taxes charged on capital gains, interest, or dividends; there are also no net-worth or public benefit taxes. Shoppers in Hong Kong can enjoy higher purchasing power since the island does not impose a sales tax.

Is it tax free in Hong Kong?

Ease of setting up and operating a business in Hong Kong. Proximity to mainland Chinese market. Highly attractive tax regime – low Hong Kong personal and corporate tax rates, no capital gains tax, no value added tax or sales tax, no withholding tax on dividends and interest or collection of social security benefits.

What taxes do you pay in Hong Kong?

Tax Rates for Individuals

Net Chargeable Income (in HKD currency) Tax rate
1 – 50,000 HKD 2%
50,001 – 100,000 HKD 6%
100,001 – 150,000 HKD 10%
150,001 – 200,000 HKD 14%