Belarus and Hong Kong signed an agreement on avoidance of double taxation of income and property on January 16, 2017.
The agreement is aimed at determining the payment of income tax, profit tax, income tax from individuals and the real estate tax.
This agreement was concluded with a goal to allocate rights of taxation between the Republic of Belarus and Hong Kong and evade double taxation. Accordingly, at present, taxing of those incomes is arranged, which the resident staying or registered in one country gets in the other contracting country.
The agreement also secured the place of tax payment (Belarus or Hong Kong), as well as the order of elimination of double taxation.
Tax rates set in the agreement with Hong Kong decreased in comparison with the established by the legislation of the Republic of Belarus on the following forms:
Royalties – from 15 % up to 3 % (in case of granting use of aircraft) and up to 5 % (in other cases);
Dividends – with 12 % for organizations and 13 % for individuals up to 5 %;
Percentages – with 10 % for organizations and 13 % for individuals up to 5 %.
The agreement also changed the criterion in order to accept the construction site as well as construction, installation or assembly object or related oversight activities of the permanent mission. Prior to the entry into force of the agreement in accordance with Belarusian legislation such a construction site, an object, or activity recognizes the permanent mission if there are more than 180 days in any twelve-month period, but when agreement entries into force, the permanent mission on such sites would only arise if they exist for a period exceeding 12 months.
The agreement will enter into force from the date of receipt of the last notification of the parties to execute procedures required for its coming into force.