The Netherlands and Hong Kong sign tax deal
The Dutch Minister of Finance, Jan Kees de Jager, and Professor Chan Ka Keung, Secretary for Financial Services and the Treasury for Hong Kong, signed a tax treaty between the Netherlands and Hong Kong on 22 March. The main purpose of the treaty is to avoid double taxation.
Economic relations boosted
Hong Kong and The Netherlands signed the agreement, saying the move will expand mutual investments and boost economic relations between the two jurisdictions. Moreover, it helps companies from Hong Kong to benefit from the competitive tax system the Netherlands has in place for international companies.
Mr De Jager commented: "Many companies have waited longingly for this treaty. The Netherlands is a large investor in Hong Kong, but investors from Hong Kong know very well where to find the Netherlands as well. The economic relations between both countries are becoming more and more intensive. That Hong Kong now joins the international standards for the exchange of information will just stimulate this even further."
Lower tax rates
The treaty avoids double taxation on income and capital gains and provides certitude about the fiscal processing of revenues, such as operating profits, dividends, employment income and pensions. In addition, the treaty is intended to prevent tax dodging and provides for the exchange of information with regard to taxes in accordance with the OECD standards. The treaty has still to be adopted by the parliaments of both countries.
Greater flow of investment
"I am confident the agreement will encourage greater flow of investment, technology, talent and expertise between us for the mutual benefit of both economies. The Hong Kong-Netherlands [deal] is the first agreement we concluded with an Organisation for Economic Co-operation & Development member country adopting the latest international standard on exchange of information," Professor Chan said, adding he hopes this will become an impetus for Hong Kong to expand its treaty network.
More information about the treaty and the text of the treaty itself can be found on the website of the Dutch Ministry of Finance.
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