HK, ARMENIA SIGN TAX PACT

24-6-2024

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Hong Kong today signed a comprehensive avoidance of double taxation agreement (CDTA) with Armenia.

Secretary for Financial Services & the Treasury Christopher Hui said the CDTA is the 50th agreement that Hong Kong has concluded, marking a major milestone in the Hong Kong Special Administrative Region Government's drive to expand the city's tax treaty network.

“We will continue to sign CDTAs with more trading and investment partners to promote closer economic and trade ties between Hong Kong and the rest of the world. This will enhance the attractiveness of Hong Kong as a business and investment hub, and consolidate the city's status as an international economic and trade centre.”

Mr Hui also pointed out that the CDTA sets out the allocation of taxing rights between Hong Kong and Armenia, which will help investors better assess their potential tax liabilities from cross-border economic activities.

“I have every confidence that the CDTA will encourage the business sectors of both sides to do business or make investments,” he added.

According to the Hong Kong-Armenia CDTA, Hong Kong companies can enjoy double taxation relief in that any tax paid in Armenia, whether directly or by deduction, 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, Armenia's withholding tax rate for Hong Kong residents on dividends will be capped at 0% or 5%, while that on interest and royalties will be capped at 5%.

The CDTA will come into force after both jurisdictions complete their ratification procedures.

The Financial Services & the Treasury Bureau explained that in Hong Kong's case, the CDTA will be implemented by way of an order to be made by the Chief Executive-in-Council under the Inland Revenue Ordinance, which is subject to negative vetting by the Legislative Council.




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