HK, Bangladesh ink tax agreement

The pact sets out the allocation of taxation rights between the two jurisdictions.

Hong Kong and Bangladesh have signed a comprehensive avoidance of double taxation agreement (CDTA) to help investors better assess their potential tax liabilities from cross-border economic activities between the two jurisdictions.

According to the local government, the CDTA sets out the allocation of taxation rights between HK and Bangladesh.

“Hong Kong companies can enjoy double taxation relief as any tax paid in Bangladesh, whether directly or by deduction, will be allowed as a credit against tax payable in Hong Kong in respect of the same income, subject to the provisions of the tax laws of Hong Kong,” the government said.

“Bangladesh’s withholding tax rates for Hong Kong residents on dividends will be capped at 10% or 15%, depending on their shareholdings. On interest, royalties and fees for technical services, the rate will be capped at 10%,” the government added.

Under the tax pact, residents deriving profits from international shipping in Bangladesh can also get a 50% tax reduction on profits subject to tax there.