Tax Treatment of Cross-Border Dividends from Hong Kong Companies
- rsatax
- 10 hours ago
- 6 min read
Hong Kong operates a territorial tax system and does not impose withholding tax on dividends. Consequently, the effective taxation of dividend flows depends on the tax legislation of the recipient jurisdiction and on the correct application of Double Taxation Agreements (DTAs).
Hong Kong Double Taxation Agreements
Hong Kong maintains an extensive network of Double Taxation Agreements (DTAs) covering dividends, interest, royalties, and technical service fees across a wide range of jurisdictions, offering significant tax planning opportunities for international investors and multinational enterprises.
Armenia (2026/2027) applies a zero rate on dividends, while interest, royalties and technical fees are all subject to a 5% withholding tax.
Austria (2012/2013) provides for a zero withholding tax on dividends, a 10% rate on interest, no withholding on royalties, and a 3% rate on technical fees.
Bahrain (2026/2027) does not levy withholding tax on dividends or interest, whereas royalties are taxed at a rate of 5%.
Bangladesh (2025/2026) applies withholding tax rates of 10% on dividends, 15% on interest and 10% on royalties, with technical fees taxed at 10% for both qualifying companies and other recipients.
Belarus (2018/2019) levies a 5% withholding tax on both dividends and interest, while royalties are subject to rates of either 3% or 5%.
Belgium (2004/2005) applies a 0% or 5% rate on dividends, a 15% rate on interest, a 10% rate on royalties and a 5% rate on technical fees.
Brunei (2011/2012) does not impose withholding tax on dividends, applies rates of 5% or 10% on interest, levies a 5% rate on royalties, and taxes technical fees at 15%.
Cambodia (2020/2021) applies uniform withholding tax rates of 10% on dividends, interest, royalties and technical fees.
Canada (2014/2015) applies a 5% withholding tax on dividends, a 15% rate on interest, and 10% on both royalties and technical fees.
Chinese Mainland (2007/2008) subjects dividends to a 5% rate and interest to a 10% rate, while royalties are taxed at 7% and technical fees at either 5% or 7%.
Croatia (2025/2026) applies a 5% withholding tax uniformly to dividends, interest and royalties.
Czech Republic (2013/2014) taxes dividends at 5%, does not levy withholding tax on interest, and applies a 10% rate to royalties.
Estonia (2020/2021) applies a zero rate on dividends, a 10% rate on interest, royalties at either 0% or 10%, and a 5% rate on technical fees.
Finland (2019/2020) provides for a 5% withholding tax on dividends, a 10% rate on interest, no withholding on royalties, and a 3% rate on technical fees.
France (2012/2013) applies a uniform withholding tax rate of 10% to dividends, interest and royalties.
Georgia (2022/2023) levies a 5% withholding tax on dividends, interest and royalties.
Guernsey (2014/2015) does not impose withholding tax on dividends or interest, while royalties are subject to a 4% rate.
Hungary (2012/2013) applies a 5% rate on dividends, a 10% rate on interest, and 5% on both royalties and technical fees.
India (2019/2020) subjects dividends to a 5% rate, interest to a 10% rate, and applies a 10% withholding tax on both royalties and technical fees.
Indonesia (2013/2014) applies withholding tax rates of 5% on dividends, 10% on interest and royalties, and 5% on technical fees.
Ireland (2012/2013) does not levy withholding tax on dividends, applies a 10% rate on interest, and taxes royalties at 3%.
Italy (2016/2017) applies withholding tax rates of 10% on dividends, 12.5% on interest and 15% on royalties.
Japan (2012/2013) taxes dividends at 5%, interest at 10%, royalties at 10%, and technical fees at 5%.
Jersey (2014/2015) does not impose withholding tax on dividends or interest, while royalties are subject to a 4% rate.
Korea (2017/2018) applies withholding tax rates of 10% on dividends, 15% on interest, and 10% on both royalties and technical fees.
Kuwait (2014/2015) levies a 5% withholding tax on dividends, interest and royalties.
Latvia (2018/2019) applies a zero rate on dividends, a 10% rate on interest, royalties at either 0% or 10%, and technical fees at either 0% or 3%.
Liechtenstein (2012/2013) does not impose withholding tax on dividends or interest, while royalties are taxed at 3%.
Luxembourg (2008/2009) applies a zero rate on dividends, a 10% rate on interest, no withholding on royalties, and a 3% rate on technical fees.
Macao SAR (2021/2022) subjects dividends and interest to a 5% rate and applies a 3% withholding tax on royalties.
Malaysia (2013/2014) applies withholding tax rates of 5% on dividends, 10% on interest and royalties, with technical fees taxed at 8% for qualifying companies and 5% for other recipients.
Maldives (pending) applies withholding tax rates of 5% on dividends, 10% on interest and royalties, and 10% on technical fees for both qualifying companies and other recipients.
Malta (2013/2014) does not levy withholding tax on dividends or interest, while royalties are subject to a 3% rate.
Mauritius (2024/2025) applies a zero rate on dividends, a 5% rate on interest, and 5% on both royalties and technical fees.
Mexico (2014/2015) does not impose withholding tax on dividends, applies interest rates of either 4.9% or 10%, and levies a 10% rate on royalties.
Netherlands (2012/2013) applies a zero rate on dividends, a 10% rate on interest, no withholding on royalties, and a 3% rate on technical fees.
New Zealand (2012/2013) taxes dividends at either 0% or 5%, applies a 15% rate on interest, and levies 10% on royalties and 5% on technical fees.
Pakistan (2018/2019) applies withholding tax rates of 10% on dividends, interest and royalties, and a 12.5% rate on technical fees.
Portugal (2013/2014) applies a 5% rate on dividends, a 10% rate on interest, and 10% on royalties, while technical fees are taxed at 5%.
Qatar (2014/2015) does not levy withholding tax on dividends or interest, while royalties are subject to a 5% rate.
Romania (income derived on or after 1 January 2017) applies withholding tax rates of 3% on dividends, royalties and technical fees, and a 5% rate on interest.
Saudi Arabia (2019/2020) taxes dividends at 5%, does not impose withholding tax on interest, and applies royalties rates of either 5% or 8%.
Serbia (2021/2022) applies withholding tax rates of 5% on dividends, 10% on interest and royalties, and 5% or 10% on technical fees.
South Africa (2016/2017) applies a 5% withholding tax on dividends, a 10% rate on interest and royalties, and 5% on technical fees.
Spain (2013/2014) applies a zero rate on dividends, a 10% rate on interest, and 5% on both royalties and technical fees.
Switzerland (2013/2014) applies a zero rate on dividends, a 10% rate on interest, no withholding on royalties, and a 3% rate on technical fees.
Thailand (2006/2007) applies a 10% withholding tax on dividends, interest at either 10% or 15%, and royalties at rates of 5%, 10% or 15%.
Türkiye (pending) applies withholding tax rates of 5% on dividends, 10% on interest, and 7.5% or 10% on both royalties and technical fees.
United Arab Emirates (2016/2017) applies a uniform withholding tax rate of 5% on dividends, interest and royalties.
United Kingdom (2011/2012) applies dividend withholding tax rates of either 0% or 15%, subjects interest to the domestic rate, and applies a 3% rate on royalties.
Vietnam (2010/2011) applies withholding tax rates of 10% on dividends and interest, and 7% or 10% on royalties.
Notes for country / region having more than one rate:
Overview of Tax Rates
Dividend withholding tax rates applicable to qualifying companies vary significantly among Hong Kong’s DTA partners, reflecting differences in treaty negotiations and bilateral relationships.
Dividend rates between 0% and 5%:
Armenia, Austria, Belgium, Estonia, Latvia, Luxembourg, Mauritius, the Netherlands, New Zealand (selective rates), Spain, Switzerland, and the United Kingdom offer treaty-based rates of 5% or lower for qualifying companies, often resulting in very low or nil withholding tax on dividends.
Dividend rates between 5% and 10%:
Canada, Mainland China, Croatia, the Czech Republic, Finland, France, Hungary, India, Indonesia, Japan, Korea, Malaysia, Macao SAR, and Portugal apply dividend withholding tax rates ranging from 5% to 10%, in line with common international treaty practice.
Dividend rates above 10%:
Cambodia, Bangladesh, Italy, Pakistan, Saudi Arabia, Serbia, South Africa, Thailand, and Vietnam apply rates exceeding 10%, typically between 10% and 15%, depending on the specific treaty provisions and the taxpayer’s profile.
Implications for Multinational Operations
The current DTA framework highlights Hong Kong’s role as a regional and global hub, offering tax efficiencies that help mitigate double taxation on cross-border dividends, interest, royalties, and technical service income.
Hong Kong benefits from a well-established DTA network largely drafted in line with OECD principles. These agreements are a key driver of international projects, as they provide:
Reduction of double taxation risk: treaties ensure that dividend flows are not subject to duplicate taxation between Hong Kong and the recipient jurisdiction.
Optimised withholding taxes: they allow reductions in inbound withholding taxes, for example on dividends paid from China to Hong Kong.
Recognition of economic substance: they qualify Hong Kong as a recognised jurisdiction, supporting the satisfaction of beneficial ownership and anti-abuse tests imposed by foreign tax authorities.
Regulatory certainty: they provide clarity and legal certainty in structuring international financial flows.
Compliance with OECD standards: they ensure full alignment with international best practices in tax planning.