Secretary for Financial Services & the Treasury Christopher Hui signed a comprehensive avoidance of double taxation agreement (CDTA) with Bangladesh on behalf of the Hong Kong Special Administrative Region Government.

The CDTA, signed in Hong Kong, sets out the allocation of taxation rights between the two jurisdictions and is aimed at helping investors better assess their potential tax liabilities from cross-border economic activities.

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

It also provides other tax relief arrangements. Bangladesh’s withholding tax rates for Hong Kong residents on dividends will be capped at 10% or 15%, depending on their shareholdings. On interest, royalties and fees for technical services, the rate will be capped at 10%.

Hong Kong residents deriving profits from international shipping in Bangladesh will enjoy a 50% tax reduction on profits subject to tax there.

The CDTA is the 47th such agreement Hong Kong has concluded and will come into force after the completion of ratification procedures by both jurisdictions.

Date: 2023.08.30