2019 Hong Kong-Macao Income Tax Arrangement Available

<p>The Hong Kong government has published an English translation of the Hong Kong-Macao income tax arrangement signed November 22, 2019, in Hong Kong and November 25, 2019, in Macao. </p> <p>Under the arrangement, dividends and interest are taxable at a maximum rate of 5 percent, while royalties are subject to a 3 percent rate. Exemptions apply if the dividends or interest are paid to any institution wholly or mainly owned by the government of either contracting party or they are paid to:</p> <p>In Hong Kong:</p> <ul> <li>the government of Hong Kong</li> <li>the Hong Kong Monetary Authority;</li> <li>the Exchange Fund; </li> </ul> <p>In Macao:</p> <ul> <li>the government of Macao;</li> <li>the Monetary Authority of Macao;</li> <li>the Pension Fund;</li> <li>the Social Security Fund.</li> </ul> <p>Hong Kong generally uses the credit method to eliminate double taxation, while Macao uses a combination of the credit and exemption methods. </p> <p>This is the first arrangement of its kind between Hong Kong and Macao. It will enter into force once ratification instruments are exchanged and its provisions will apply in Hong Kong beginning January 1 of the year following entry into force and in Macao beginning April 1 of the year following entry into force.</p>

<p><a href="/lr/resolve//2b59g">Chinese text</a>; <a href="/lr/resolve//2cp6m">Portuguese translation</a>. <a href="/lr/resolve//2cp8j">Related coverage</a>.</p>

<p>This translation was published in the Hong Kong e-Gazette as L.N. 84 of 2020.</p>

<p>January 1, 2021 (Macao); April 1, 2021 (Hong Kong). See Article 28.</p>

<p>The Hong Kong government has published an English translation of the Hong Kong-Macao income tax arrangement signed November 22, 2019, in Hong Kong and November 25, 2019, in Macao. </p>

The Hong Kong government has published an English translation of the Hong Kong-Macao income tax arrangement signed November 22, 2019, in Hong Kong and November 25, 2019, in Macao.  Under the arrangement, dividends and interest are taxable at a maximum rate of 5 percent, while royalties are subject to a 3 percent rate. Exemptions apply if the dividends or interest are paid to any institution wholly or mainly owned by the government of either contracting party or they are paid to: In Hong Kong: the government of Hong Kong the Hong Kong Monetary Authority; the Exchange Fund;  In Macao: the government of Macao; the Monetary Authority of Macao; the Pension Fund; the Social Security Fund. Hong Kong generally uses the credit method to eliminate double taxation, while Macao uses a combination of the credit and exemption methods.  This is the first arrangement of its kind between Hong Kong and Macao. It will enter into force once ratification instruments are exchanged and its provisions will apply in Hong Kong beginning January 1 of the year following entry into force and in Macao beginning April 1 of the year following entry into force.

<h4>Rate Table Instructions</h4> <ul> <li>You must enter a rate for each rate type</li> <li>Enter only one rate value per row</li> <li>You may leave the country columns blank if the rate is the same for both countries</li> <li>Country names (if entered) must exactly match the jurisdictions</li> <li>Leave the Partner Country column blank if you want the rate to apply to all partners of the Main Country</li> <li>Enter "n/a" in each rate row to hide the partner in the Main Country table</li> <li>Note that the same rates may apply for Main Country and Partner Country or the Main Country may apply different rates to the Partner Country</li> </ul> <table> <tbody> <tr><th> <div>Rate Type</div> (Dividends, Interest, Royalties)</th><th>Main Country</th><th>Partner Country</th><th>Rate</th><th>Footnote 1</th><th>Footnote 2</th><th>Footnote 3</th><th>Footnote 4</th></tr> <tr> <td>Dividends</td> <td> </td> <td> </td> <td>5 </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr> <td>Interest</td> <td> </td> <td> </td> <td>5</td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr> <td>Royalties</td> <td> </td> <td> </td> <td>3 </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> </tbody> </table>

Hong Kong - Macao: 2019 Income Tax Arrangement and Final Protocol (English Translation)

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2019 Hong Kong-Macao Income Tax Arrangement Available