The tax treaty that the Netherlands signed with Hong Kong on March 22, 2010 has been sent to the House of Representatives. Upon approval by the House of Representatives, the tax treaty will be sent to the Senate for approval.

Key provisions tax treaty:

  • A withholding tax of 0% on dividends if the beneficial owner is a company with a capital wholly or partly divided into shares which holds directly at least 10% of the capital of the company paying the dividends, provided that the Limitation of Benefi ts requirements are met. Otherwise, the withholding tax rate is maximized to 10%.
  • Withholding tax of 0% on interest.*
  • Withholding tax on royalties paid from Hong Kong to the Netherlands shall not exceed 3% of the gross amount of the royalties.*

*Based on current law, both The Netherlands and Hong Kong do not levy a withholding tax on interest payments. The Netherlands also does not levy a withholding tax on royalty payments.