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Hong Kong, Romania DTA In Effect

by Mary Swire, Lowtax.net, Hong Kong
16 December, 2016

On December 9, Hong Kong's Inland Revenue Department announced that the double taxation agreement (DTA) between Hong Kong and Romania has come into force and will have effect with respect to income derived on or after January 1, 2017.

Under the DTA with Romania, which was signed in November 2015, and has been ratified by both sides, Hong Kong income tax paid by Romanian residents or companies will be allowed as a deduction from any tax payable in respect of the same income in Romania.

The withholding tax rate on royalties derived by Hong Kong residents in Romania will be reduced from the current rate of 16 percent to three percent.

The withholding tax rate on interest derived by Hong Kong residents in Romania will be reduced from the current rate of 16 percent to zero or three percent. The zero rate would be applicable if Hong Kong levies no withholding tax on interest. Otherwise, the rate will be capped at three percent.

The withholding tax rate on dividends derived by Hong Kong residents in Romania will be reduced from the current rate of 16 percent to three percent or five percent. The cap of three percent would be applicable if the beneficial owner is a company which holds directly at least 15 percent of the capital of the company paying the dividends. Otherwise, the rate will be capped at five percent.

Profits from international shipping transport earned by Hong Kong residents that arise in Romania will enjoy full tax exemption.


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