The recently signed tax treaty between the Nether-lands and Hong Kong provides new tax planning opportunities for China-related investments

The treaty features 0% withholding tax on interest payments, and provides for 0% withholding tax on dividends paid to Hong Kong companies, such as banks, insurance companies, headquarters, and certain others. Hong Kong is allowed to levy 3% withholding tax on royalty payments. In line with international practice, this treaty generally protects the residents of one country against taxation in the other country.

The treaty is expected to enhance mutual invest-ment between the Netherlands, Hong Kong, and mainland China. Combined with the favorable Dutch holding regime and the extensive Dutch tax treaty network, this treaty offers many interesting opportunities to efficiently structure international investments in or through the Netherlands.

Click here to view the treaty.