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Hong Kong – Pakistan Double Tax Treaty

Hong Kong – Pakistan Double Tax Treaty

Hong Kong and Pakistan have signed a double tax treaty to prevent the double taxation of individuals or companies. The agreement will also serve as an instrument for the avoidance of tax evasion. 

The agreement will be beneficial both to companies and to individuals who are residents of one or both regions and derive some form of income (from one or both jurisdictions).

Hong Kong has signed many such double tax treaties with countries worldwide. These agreements are destined to encourage foreign investments and promote Hong Kong’s image as an important regional business hub.

Taxes covered by the Hong Kong – Pakistan double tax treaty

The double tax agreement between Hong Kong and Pakistan will cancel the possibility that companies and individuals are taxed on their income in two different jurisdictions. In the case of Hong Kong, the treaty will apply to the profits tax, the salaries tax, and the property tax.

For Pakistan, the double tax treaty with Hong Kong will apply on the income tax and the super tax as well as any other identical or similar taxes imposed by either jurisdiction after the signature date of the treaty.

Investors in Hong Kong have to comply with the current taxation requirements which include the corporate income tax, with a low value of 16.5% and a lower rate for unincorporated businesses, and other taxes on companies. The taxation of individuals in Hong Kong is made using progressive rates.

in order to open a Hong Kong company, investors will need to comply with the initial registration requirements and the subsequent taxation and reporting obligations.

Other treaty provisions

Double tax treaties offer a reduced withholding tax on dividends, interest, and royalties. While Hong Kong does not impose a tax on dividends, those investors who were taxed in Pakistan will not benefit from a reduced rate.

The double tax treaty promotes economic cooperation and investment between Hong Kong and Pakistan and allows investors to better assess their tax liabilities.

Pakistani foreign investors in Hong Kong can contact us for more information on the provisions of the treat and advice on doing business and company registration in Hong Kong.