Pakistan’s government announced January 2 that a comprehensive tax treaty signed by Pakistan and Hong Kong entered into force on November 24, 2017.
The Pakistan-Hong Kong tax treaty, signed February 17, 2017, addresses Hong Kong profits tax, property tax, and salaries tax as well as Pakistan income tax and super tax. Other similar taxes imposed after the date of the treaty’s signing are also covered.
The treaty limits the withholding tax rate on dividends, royalties, and interest to 10 percent. The withholding tax on interest is zero if the owner is a government or institution authorized by the government.
The new Pakistan-Hong Kong tax treaty also provides for a reduced withholding tax rate of 12.5 percent on fees for technical services and includes provisions on exchange of tax information.
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