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Saudi Arabia And Hong Kong Sign DTA

by Mary Swire, Tax-News.com, Hong Kong

25 August 2017


Hong Kong and Saudi Arabia have signed a comprehensive agreement for the avoidance of double taxation.

The agreement outlines the allocation of taxing rights between the two jurisdictions Under it, any Saudi Arabian tax paid by Hong Kong companies will be allowed as a credit against the tax payable in Hong Kong on the same profits, subject to the provisions of Hong Kong tax laws. Tax payable by Saudi companies in Hong Kong will be conversely be allowed as a deduction from the tax payable on the same income in Saudi Arabia.

The DTA caps withholding tax on dividends at five percent. Royalties paid for the use of, or the right to use, industrial, commercial, or scientific equipment will be taxed at five percent, with all other royalty payments facing an eight percent rate.

The DTA will come into force after both sides have completed their domestic ratification procedures.

TAGS: tax | double tax agreement (DTA) | Saudi Arabia | royalties | withholding tax | Hong Kong | dividends

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