Hong Kong and Guernsey sign comprehensive DTA

The DTA will also further enhance business and investment ties between the signatories.

Hong Kong’s agreement with the Bailiwick of Guernsey caps the withholding tax rate on royalties to 4%, providing the recipient is the beneficial owner of the asset from which the royalty income is derived.

It also includes provisions for the exchange of tax information on request. Hong Kong has so far signed seven DTAs, five of which were signed this year.

The Hong Kong DTA was signed by Guernsey Chief Minister Peter Harwood, who said this was a further important step in growing the business links between Guernsey and the Far East. Harwood said he was delighted to further strengthen Guernsey’s relationship with Hong Kong.

“The signing of this DTA, combined with the visit of the Chinese Ambassador to the UK to Guernsey this week, recognizes the importance attached to Guernsey’s business relationship with the Far East. The agreement is expected to bring significant commercial benefits to our finance sector, resolving issues relating to potential double taxation, and leading to greater opportunities for new business."

A number of Guernsey-based firms have offices in Hong Kong, including law firms Mourant Ozannes and Ogier, fund administrator International Administration Group and fiduciary services providers Louvre, Nerine and Newhaven.

Guernsey, officially the Bailiwick of Guernsey, is a British Crown dependency in the English Channel off the coast of Normandy.