Hong Kong ratified the pending income tax treaty with Romania on 29 July 2016. The treaty, signed 18 November 2015, is the first of its kind between the two jurisdictions.
The treaty covers Hong Kong profits tax, salaries tax and property tax. It covers Romanian tax on income and tax on profit.
The following capital gains derived by a resident of one Contracting Party may be taxed by the other Party:
Gains from the alienation of other property by a resident of a Contracting Party may only be taxed by that Party.
The beneficial provisions of Articles 10 (Dividends), 11 (Interest), 12 (Royalties) and 20 (Other Income) will not apply if it was the main purpose or one of the main purposes of any person concerned with the creation or assignment of the shares, debt-claims or other rights in respect of which the dividends, interest, royalties, or other income are paid was to take advantage of those Articles by means of that creation or assignment. The limitation is included in each of those Articles.
Both Parties apply the credit method for the elimination of double taxation.
The treaty will enter into force once the ratification instruments are exchanged, and will apply from 1 January of the year following its entry into force.
Note - this article has been amended to reflect that the treaty was only ratified by Hong Kong on 29 July 2016 and did not enter into force as initially reported.
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