A comprehensive tax treaty between Hong Kong and Finland entered into force on December 30, a Hong Kong government spokesperson has announced.
According to the spokesperson, both Hong Kong and Finland have completed all the steps needed for the ratification of the agreement.
The tax treaty was signed by the two countries in May 2018.
Under the treaty, Finland’s withholding tax rates for Hong Kong residents on dividends, currently set at 20 percent for companies and 30 percent for individuals, is capped at 5 percent if the beneficial owner is a company that controls at least 10 percent of the voting power in the company paying the dividend and is 10 percent in other cases.
The withholding tax rate for royalties under the treaty is 3 percent.
The treaty also provides special tax benefits for Hong Kong airlines operating flights to Finland, which would be taxed at Hong Kong’s corporation tax rate and would not be taxed in Finland.
Further, under the treaty, profits from international shipping transport earned by Hong Kong residents arising in Finland are exempt from tax in Finland.
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