withholding tax and double tax treaty in china
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An NCO China Presentation: Witholding Tax and Double Tax Treaty. www.ncochina.comTRANSCRIPT
Withholding Tax in ChinaUpdated Regulations
Relationship between Withholding Tax and Double Tax Treaty
Withholding tax & double tax treaty
Purpose of double tax treaty:
• Avoid double taxation in home and foreign countries;
• Prevent income tax evasion.
Withholding tax & double tax treaty
Double Tax Treaty - Tax Rates
CountryTax Rate
Dividend Interest Royalty
Sweden 5%* 10% 10%**
Denmark 10% 10% 10%**
Hong Kong 5%* 7% 7% **
Singapore 5%* 7% 10%**
*The parent company needs to control more than 25% shares of the subsidiary.
** There some special requirement on Royalty
Withholding tax & double tax treaty
• Double tax treaty will prevail over Chinese tax regulations.
• Must make application to receive tax treatment under double tax treaty.
Withholding tax & double tax treaty
• The six-month rule.
• Income tax will be exempted if the loan is provided by government bodies.
• Double tax treaty applies only to income taxes.
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