The Hong Kong Special Administrative Region (SAR) of China signed a double tax agreement with Guernsey on 22 April 2013. The agreement provides for the taxation of business profits of a permanent establishment in the other contracting state and contains articles on non-discrimination, dispute resolution and the exchange of information. The permanent establishment definition of the treaty generally follows the UN Model.
Under the treaty dividends and interest are taxable only in the state of residence of the recipient. Royalties may be subject to a maximum 4% withholding tax. The agreement will enter into force when the two jurisdictions have completed ratification procedures.
