Guernsey and Hong Kong have signed the Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.
The Guernsey Chief Minister Peter Harwood commented that “this was a further important step in growing the business links between Guernsey and the Far East. The agreement is expected to bring significant commercial benefits to our finance sector, resolving issues relating to potential double taxation, and leading to greater opportunities for new business."
The agreement is aimed to further deepen the business relationships between the two jurisdictions especially in terms of financial services, investments, fiduciary services and intellectual property. The agreement also includes provision for the exchange of tax information on request of competent authorities in relation to the taxes referred to in the agreement.
The agreement will assist individuals and corporations in resolving issues relating to double taxation of both corporate and personal incomes, such as business profits, dividends, interest, royalties, income from employment and pensions. In particular the document caps the withholding tax rate on royalties to 4%, providing the recipient is the beneficial owner of the asset from which the royalty income is derived.
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