HK Withholding Tax on Royalties
Hong Kong SAR imposes a withholding tax on certain royalty payments made to non-residents. However, there are no withholding taxes on dividends or interest payments.
Withholding Tax on Royalties:
General Rate: The withholding tax rate on royalties paid to non-resident corporations is generally 16.5%. However, the rate is reduced to 8.25% for the first HKD 2 million of assessable profits.
Concessionary Rate: In certain cases, a concessionary rate of 2.475% to 4.95% may apply, subject to specific conditions.
Deemed Profits: If the non-resident recipient is not subject to Hong Kong SAR profits tax, a deemed profit of 30% of the royalty is subject to tax, resulting in an effective withholding tax rate of 4.95%.
Key Points:
Hong Kong SAR does not impose withholding taxes on dividends or interest.
The withholding tax on royalties is generally 16.5%, but can be lower in certain cases.
If the non-resident recipient is not subject to Hong Kong SAR profits tax, a deemed profit of 30% of the royalty is subject to tax.
Additional Resources:
How Bestar Can Help
Bestar can provide valuable assistance with various tax-related matters. Here are some ways we can help:
1. Tax Compliance:
Filing Tax Returns: We can help you prepare and file your individual, corporate, or trust tax returns accurately and on time.
Calculating Tax Liability: We can determine your tax liability based on your income, deductions, and credits.
Avoiding Penalties: We can help you identify and avoid potential tax penalties or interest charges.
2. Tax Planning:
Minimizing Tax Burden: We can develop strategies to help you minimize your tax liability legally.
Estate Planning: We can assist with estate planning to reduce potential estate taxes.
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Representation: If we are selected for a tax audit, we can represent you and negotiate with the tax authorities.
Dispute Resolution: We can help you resolve any tax disputes or appeals.
4. International Tax:
Cross-Border Transactions: We can provide guidance on the tax implications of cross-border transactions, such as investments, business operations, or expatriation.
Double Taxation Avoidance: We can help you avoid double taxation by utilizing tax treaties and other strategies.
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General Tax Questions: We can answer your general tax questions and provide personalized advice.
Tax Law Changes: We can keep you informed about changes in tax laws and regulations.
6. Specialized Tax Services:
Business Taxes: We can help you with business taxes, including corporate, partnership, and S corporation taxes.
Nonprofit Taxes: We can assist nonprofit organizations with their tax filings and compliance.
Fiduciary Taxes: We can handle tax matters related to trusts and estates.
By engaging Bestar, you can benefit from our expertise, save time, and potentially reduce your tax liability. It's advisable to choose a tax professional who is qualified and knowledgeable in the specific area of tax law that you need assistance with.
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