Hong Kong and Pakistan signed a tax treaty on February 17, the Hong Kong government has announced.
This is the 37th tax treaty signed by Hong Kong, noted Professor K C Chan, Hong Kong’s Secretary for Financial Services and the Treasury. The treaty is not yet in force.
“With the CDTA coming into force after the completion of ratification procedures on both sides, I have every confidence that the economic and trade connections between the two places will be bolstered,” Professor Chan said.
The agreement reduces the Pakistani withholding tax rate on Hong Kong residents on royalties to zero and on fees for technical services to 12.5 percent. The current Pakistani withholding rate is 15 percent.
Pakistan’s withholding tax rate on dividends and interest is reduced to 10 percent.
Special rules are provided for taxing Hong Kong airline and international shipping transport profits, and the treaty also includes provisions on exchange of information
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