In order to avoid double taxation, Hong Kong and Republic of Korea signed a double taxation agreement on 08 July 2014. The Agreement was concluded in the Chinese, Korean and English languages, each text having equal authenticity. In the case of divergence, however, the English text prevails. The Agreement generally follows the OECD Model.
Under the treaty, the following withholding taxes will apply:
- Dividends: 15% on dividends in general, and 10% if the beneficial owner is a company (other than a partnership) which holds directly at least 25% of the capital of the company paying the dividends.
- Interest: 10%
- Royalties: 10%
The new agreement has also incorporated the internationally-agreed standard on exchange of information relating to tax matters.
