Double Taxation Agreement between Hong Kong and Belgium

  1. The DTA at a glance
  2. The full Text of the agreement
  3. The DTA, by Fortis Intertrust
  4. The DTA between Hong Kong and China, by Loyens Advocaten- Avocats
  5. The four main types of foreign investments in China, Text by Sinova Management Consultancy Ltd.
  6. The Best Reasons to invest in Belgium
  7. Useful links

1. The DTA at a glance.

On 10 December 2003, the Hong Kong S.A.R. and the Kingdom of Belgium have signed the Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital. It came into effect in Belgium on 1 January 2004 and in Hong Kong on 1 April 2004.
 
This comprehensive tax treaty, also referred to as the Double Taxation Agreement (DTA), the first signed by Hong Kong with any country, will translate into tax savings for Belgian and Hong Kong investors doing business in each other’s areas through tax rights between the two entities and tax relief in case of double taxation.
 
The DTA also means that Hong Kong investors can leverage the tax advantages to use Belgium as a springboard to enter the European Union market.
 
The fact that Hong Kong has also signed a DTA with the People’s Republic of China replicates similar advantages for Belgian companies willing to expand their activities in China.
 
Since 1 January 2006, the Belgian government has introduced an additional tax incentive for foreign investors with the concept of “Notional Interest Deduction”, which allows for a tax deduction for the cost of capital. This advantage applies to both Belgian and foreign companies with a taxable presence in Belgium. At the same time, the 0.5% registration duty on capital contributions (so-called “capital tax”) have been abolished, drastically reducing the cost of equity investing in Belgium.

 

THE DTA MAIN FEATURES
Put very simplistically, the treaty main features are: 

Dividends:
When a Belgian company pays dividends to its Hong Kong shareholder, withholding taxes are calculated as follows:

  • 0 % tax if the Hong Kong company holds 25% of the Belgian company’s capital
  • 5 % tax if the Hong Kong company holds 10 % of the shares
  • 15 % tax in all other cases

Interests payments:
They are rated at 0 % on:

  • commercial debt claims (including debt claims represented by commercial paper, resulting from deferred payments for goods, merchandise or services supplied by an enterprise
  • interest on debt claims or loans of any nature – not represented by bearer instruments – paid to banking enterprises
  • interest on certain loans related to the Hong Kong or Belgian Government

Other interest is rated at ten percent. However Belgian domestic rules foresee a zero percent tax where certain conditions are satisfied.

Royalties:
They shall not exceed 5 %.

 

2. The Full text of the Agreement.

 

3. The Double Taxation Agreement, by Fortis Intertrust

 

4. The Double Taxation Agreement between Hong Kong and China, by Loyens Advocaten- Avocats

 

5. The four main types of foreign investments in China, Text by Sinova Management

 

6. The Best reasons to invest in Belgium

 

7. Useful links

On National level:

Belgian Federal Government general website : www.investinbelgium.fgov.be

Federal Government document

« Road Map for the Foreign Investors in Belgium »
http://www.investinbelgium.fgov.be/pdf/Roadmap.pdf by Marc VERWILGHEN, Minister for Economy, Energy, Foreign Trade and Science Policy

 

On Regional level: 

Brussels Capital Region
The Brussels Enterprise Agency
9/F, St John's Building,
33 Garden Road
Central, Hong Kong
Tel: 852 2524 3111 - Ext 17
Fax: 852 2868 5997
Contact: Ms. Elodie Maurel
Hong Kong Representative
E-mail: e.maurel@investinbrussels.com
www.investinbrussels.com

 

Flanders:
Flanders Investment & Trade Agency
9/F, St John's Building
33 Garden Road
Central, Hong Kong
Tel.: 852 2523 2246
Fax: 852 2524 7462
Contact: Ms. Tonia Van de Vyver
Consul - Trade Commissioner
E-mail: hongkong@fitagency.com
www.flandersinvestmentandtrade.com
Chinese version available

 

Wallonia
Walloon Foreign Trade & Investment Agency
9/F, St. John's Building
33 Garden Road
Central, Hong Kong
Tel: 852 2537 5762
Fax: 852 2537 5834
Contact: Mr. Guy Bertrand
Trade Commissioner
E-mail: awexhk@netvigator.com
www.awex.be

 

http://www.investinwallonia.be/ofi-belgium/accueil.php