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Hong Kong confirms 10% dividends withholding tax from China

Hong Kong’s Financial Services and Treasury Bureau (FSTB) has confirmed that dividends paid to Hong Kong investors by companies in China will be subject to a 10% withholding tax.

The news comes after the Hong Kong government received a reply from China’s State Administration of Taxation clarifying the arrangements concerning the tax payable to the mainland.

The FSTB said: “Individual shareholders in general will be subject to a withholding tax rate of 10% with reference to the arrangement for the avoidance of double taxation signed between mainland China and Hong Kong. They do not have to make any applications for entitlement to the above-mentioned tax rate.”

It was also confirmed that shareholders who are resident in other countries, and whose countries have reached an agreement with China on an applicable withholding tax rate, have to follow the bilateral tax agreement for dividends paid by mainland companies listed in Hong Kong.

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