According to an update from the Hong Kong Department of Justice, the income tax treaty between Hong Kong and Romania entered into force on 21 November 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 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 income is 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 applies from 1 January 2017.
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