Details of the income tax treaty and protocol between Hong Kong and New Zealand, signed on 1 December 2010, have become available. The treaty was concluded in the English language and generally follows the OECD Model Convention.
The maximum rates of withholding tax are:
|-||15% on dividends generally; 5% if the beneficial owner is a company owning directly at least 10% of the voting power of the company paying the dividends. However, dividends are exempt if the dividends are received by a company owning directly or indirectly at least 50% of the voting power of the company paying the dividends, and which meets specified requirements (listing, eligibility for treaty benefits etc.).|
|-||10% on interest; and|
|-||5% on royalties; there are no provisions for managerial or technical service fees.|
Deviations from the OECD Model include that:
|-||A building site, or a construction, installation or assembly project, or supervisory activities in connection with that building site or construction, installation or assembly project, constitutes a permanent establishment if such site, project or activities last more than six months (Art.5(3));|
An enterprise shall be deemed to have a permanent establishment in a Contracting Party and to carry on business through that permanent establishment if for more than 183 days in any 12 month period:
Hong Kong and New Zealand generally apply the credit method to avoid double taxation.
Neither contracting party can terminate this treaty during a period of 5 years starting from the date of its entry into force (Art. 27).
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