HONG KONG, Jul. 12 – Hong Kong has signed comprehensive double tax agreements (DTAs) with eight countries since March.

The special administrative region now has DTAs with Brunei, Indonesia, Netherlands, Austria, Hungary, Kuwait, Ireland and the United Kingdom following the exchange of information model from the Organization for Economic Cooperation and Development.

The agreements are aligned with Hong Kong’s goal to become a global business center and promote tax transparency. It will also cut instances of double taxation on the same source of income, decrease withholding tax rates on passive income from dividends, interest and royalties and dictate taxing rights between Hong Kong and the partner countries.

Hong Kong will continue to work towards expanding its network of DTAs with trade partners. The latest DTAs are expected to be enforced by 2011. So far, Hong Kong has signed a total of 40 DTAs. The full list can be seen here.

Businesses must be aware of the provisions of the DTAs to be able to gauge potential tax liabilities on certain trade activities as well as be aware of the accompanying incentives.

For professional advice on DTAs e-mail Dezan Shira & Associates at hongkong@dezshira.com.