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The Netherlands signs a new treaty with Hong Kong


On 22 March 2010 the Dutch Minister of Finance, the Secretary for Financial Services and the Treasury of the Hong Kong Special Administrative Region signed the first tax treaty between the Netherlands and Hong Kong. Taxand Netherland's latest alert focuses primarily on the withholding tax rates in the treaty.

It is expected that the new treaty will further increase mutual investments. The main benefit is that the treaty, once in force, allows investments from Hong Kong (and indirectly China) in a way that profits can be repatriated to Hong Kong without withholding tax.

The important withholding tax rates are on dividends from the Netherlands to Hong Kong and on royalties from Hong Kong to the Netherlands as the Netherlands does not levy a withholding tax on dividends and interest.

It is expected that the treaty will have effect as of 1 January 2011 in the Netherlands and as of 1 April 2011 in Hong Kong.

Taxand's Take

The new treaty combined with the Dutch participation exeption and the extensive treaty network of the Netherlands will make it very attractive for Hong Kong (and incirectly Chinese) companies and investment funds to invest in or through the Netherlands.

Your Taxand contact for furher queries is:
Marc Sanders
T. +31 20 757 09 05

Read the full news alert from Taxand Netherlands:

Taxand's Take Author