International students studying in the UK should be aware that there are specific rules on taxation and national insurance and specific visa requirements. Each case is different and students should turn to the East Student International Affairs Council or go to a professional specializing in international taxation to be sure of their tax debts. Hong Kong and the United Kingdom use the credit method to avoid double taxation. Dividends received by a UK-based company from a Hong Kong-based company are exempt from tax only to the extent that the exemption conditions under UK law are met. Under the agreement, Hong Kong residents who receive dividends from New Zealand that are not attributable to an institution in New Zealand are subject to a reduced withholding rate of 15%. The withholding rate is further lowered to 5% or 0% for eligible beneficiaries. Hong Kongers who receive royalties from New Zealand pay a withholding tax capped at 5%. The agreement to avoid double taxation of income and the prevention of tax evasion broadens the scope of the original agreement on the benefits and income of human services, which both parties signed in 1998. In addition, under the DBA, Hong Kong airlines flying to Brunei are taxed at the Hong Kong corporate tax rate (which is lower than Brunei`s).
Profits from international shipping made by Hong Kong residents but made in Brunei, which are currently taxable in Brunei, will be tax-exempt under the agreement. With regard to the new agreement, Donald Tsang announced that in June 2001, Hong Kong had reached a limited maritime transport agreement with the United Kingdom. The agreement is limited to revenues from international maritime traffic and provides that profits made by a UK company or SAR as a result of such transactions are exempt from the territory of the other party. The provisions of the agreement, which come into force on 3 May 2001, apply to corporation tax in the United Kingdom from 1 April 2002 and from 6 April 2002, apply to income and capital gains tax. It applied to the RAD as of April 1, 2002. In some cases, it is possible for the person to apply for tax relief, but the amount of relief depends on the DBA agreement between the UK and the country from which your income comes. The situation becomes more complicated when tax rates vary from country to country. So what`s going on? To better understand the double taxation convention, we gave a typical example: in September 2012, the Commissioner for Finance said that Hong Kong had made “remarkable progress” in establishing its international network of tax treaties since the amendment of the Domestic Revenue Regulation in March 2010, and since then Hong Kong`s network of tax treaties has expanded considerably.