Bangladesh, Hong Kong sign tax agreement to boost economic ties

01 Sep '23

2 min read

Pic: Shutterstock

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Under a new comprehensive avoidance of double taxation agreement signed by Bangladesh and Hong Kong recently, firms from the latter can enjoy double taxation relief.
Any tax paid in Bangladesh, whether directly or by deduction, in accordance with the new agreement will be allowed as a credit against the tax payable in Hong Kong in respect of the same income.

Under the Hong Kong-Bangladesh Comprehensive Avoidance of Double Taxation Agreement (CDTA) signed in Hong Kong recently, Hong Kong companies can enjoy double taxation relief. Any tax paid in Bangladesh, whether directly or by deduction, in accordance with the CDTA will be allowed as a credit against the tax payable in Hong Kong in respect of the same income.

This CDTA is the 47th agreement that Hong Kong has concluded, its government said in a release.

"Bangladesh is one of the economies participating in the Belt and Road Initiative. I have every confidence that this CDTA will further promote economic and trade ties between Hong Kong and Bangladesh, and offer additional incentives for the business sectors of both sides to do business or make investment," said Christopher Hui, secretary for financial services and the treasury of the Hong Kong Special Administrative Region government.

The agreement also provides the following tax relief arrangements.

Bangladesh's withholding tax rates for Hong Kong residents on dividends will be capped at 10 per cent or 15 per cent, depending on the percentage of their shareholdings; and on interest, royalties and fees for technical services will be capped at 10 per cent.

Hong Kong residents deriving profits from international shipping transport in Bangladesh will enjoy 50 per cent tax reduction in Bangladesh in respect of the profits subject to tax there.

The CDTA will come into force after the completion of ratification procedures by both jurisdictions.

Fibre2Fashion News Desk (DS)