India-Hong Kong DTAA
Treaty signed: March 19, 2018 | Effective from: December 30, 2018
● Live · Rates served from /api/tax-rules/dtaa/HK
Dividends
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Interest
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Royalties
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Capital Gains
Fees for Technical Services
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Key Treaty Provisions
- Relatively new and comprehensive treaty (2018) - India's first DTAA with Hong Kong
- Low royalty rate of 5% makes it attractive for IP holding structures in Hong Kong
- Both India and Hong Kong apply the PPT under the MLI framework
- Finance and shipping are key sectors using this treaty
- Construction PE: 12 months
Frequently Asked Questions
What is the dividend withholding rate under India-Hong Kong DTAA?▾
The rate is 5% if the recipient company holds at least 10% of the shares of the Indian company paying the dividend. In all other cases, the rate is 10%. Both are lower than India's domestic dividend withholding rate.
Why is Hong Kong's royalty rate of 5% significant?▾
Most India DTAAs have royalty rates of 10-15%. The India-Hong Kong treaty's 5% royalty rate is among the lowest, making Hong Kong attractive for holding intellectual property that is licensed to India. However, substance requirements (PPT) must be met.
Does the India-Hong Kong DTAA apply to SAR of China or to mainland China?▾
The treaty applies to Hong Kong Special Administrative Region only. Mainland China has a separate DTAA with India (different rates). The two treaties are entirely separate.
Browse all articles
20 articlesArticle 1 of the India-Hong Kong DTAA governs persons covered.…
Article 4 of the India-Hong Kong DTAA governs resident.…
Article 5 of the India-Hong Kong DTAA governs permanent establishment.…
Article 7 of the India-Hong Kong DTAA governs business profits.…
Article 8 of the India-Hong Kong DTAA governs shipping, inland waterways, and air transport.…
Article 9 of the India-Hong Kong DTAA governs associated enterprises.…
Dividends paid by a company resident in one State to a resident of the other State may be taxed in the recipie…
Interest arising in one State and paid to a resident of the other may be taxed in the recipient's State, with …
Royalties paid to a resident of the other State may be taxed in the recipient's State; the source State retain…
FTS - payments for managerial, technical, or consultancy services - are taxed at the treaty rate where a speci…
Article 13 allocates taxing rights over capital gains between India and Hong Kong.…
Article 14 of the India-Hong Kong DTAA governs independent personal services.…
Article 15 sets the taxing rights for salaries earned by an employee of one State who works in the other.…
Article 17 of the India-Hong Kong DTAA governs artistes and sportspersons.…
Article 18 of the India-Hong Kong DTAA governs pensions.…
Article 19 of the India-Hong Kong DTAA governs government service.…
Article 23 sets out the mechanism by which double taxation is eliminated - typically through a foreign tax cre…
MAP allows the competent authorities of India and Hong Kong to resolve disputes - particularly transfer pricin…
Allows the competent authorities to exchange information necessary to apply the treaty or domestic tax laws.…
Treaty benefits are denied where the principal purpose of the transaction was to obtain them.…
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