Hong Kong and Qatar signed a comprehensive double taxation agreement
for the purpose of reducing certain withholding taxes and protecting foreign investors from taxation in both jurisdictions. The treaty is also used for the prevention of fiscal evasion.
from Qatar in Hong Kong or vice versa are the ones who benefit from the provisions of this double tax treaty
(DTA). Our experts in company formation matters in Hong Kong
can give you more details about the provisions of this double tax agreement.
Taxes covered or reduced by the DTA
The double tax treaty covers all taxes on income imposed by the Hong Kong Government and the Qatar Government. Under the DTA, the withholding tax rate on dividends and interest is 0% and for royalties, it is 5%. The treaty also contains provisions for the taxation of capital gains: under the treaty, the capital gain derived by a Hong Kong resident upon the disposal of shares is generally not taxable in Qatar.
In case of Hong Kong, the taxes for which the treaty applies are the following:
- the salaries tax,
- the property tax.
For Qatar, the double tax treaty covers the taxes on income. The treaty also applies to any other taxes levied in place of or in addition to the ones included in the agreement, imposed after the signature date.
General definitions included in the Hong Kong – Qatar DTA
Taxation under the double tax treaty is based on residence, defined as follows:
a Hong Kong resident
: an individual that usually resides in Hong Kong or spends more than 180 days during one tax year or a company that has been incorporated in Hong Kong or that it is managed from here (although incorporated elsewhere);
- a Qatar resident: an individual who has his home or centre of vital interest in Qatar or a company that has been incorporated according to the company laws in the country.
A permanent establishment, as defined in the double tax treaty can be an office, place of management, branch in Hong Kong
or Qatar, factory, workshop, farm or plantation, sales outlet or a mine, quarry or gas well. Storage spaces or facilities used solely for storage or delivery are not deemed a permanent establishment for that company. Other types of activities are also not included in the permanent establishment definition.