The Hong Kong Inland Revenue Department announced that it had signed a comprehensive avoidance of double taxation agreement (CDTA) with Armenia on Monday, 24 June 2024.

Tam Tai-pang, Commissioner of Inland Revenue, signed the CDTA on behalf of the HKSAR Government with the Government of Armenia on the margins of the Sixth High-level meeting of the Asia Initiative hosted by Armenia. Representing the Government of Armenia was Vahe Hovhannisyan, Minister of Finance of Armenia.

“This CDTA is the 50th agreement that Hong Kong has concluded. It marks a major milestone in the Government’s drive to expand Hong Kong’s tax treaty network. We will continue to sign CDTAs with more trading and investment partners to promote closer economic and trade ties between Hong Kong and the rest of the world,” said Christopher Hui, Secretary for Financial Services and the Treasury.

“This CDTA sets out the allocation of taxing rights between Hong Kong and Armenia and will help investors better assess their potential tax liabilities from cross-border economic activities. I have every confidence that the CDTA will encourage the business sectors of both sides to do business or make investments,” he added.

In accordance with the Hong Kong-Armenia CDTA, Hong Kong companies can enjoy double taxation relief in that any tax paid in Armenia, whether directly or by deduction, will be allowed as a credit against the tax payable in Hong Kong in respect of the same income, subject to the provisions of the tax laws of Hong Kong.

Moreover, Armenia’s withholding tax rate for Hong Kong residents on dividends will be capped at 0% or 5%, while that on interest and royalties will be capped at 5%.

The treaty, the first of its kind between the two countries, will come into effect once the ratification instruments are exchanged. It will apply in Armenia starting from 1 January of the year following its enforcement and in Hong Kong from 1 April of the same year.