# Hong Kong's Tax Treaty Network

> Hong Kong's CDTA network as at August 2026: 51 treaties in force, 8 signed and pending, 17 in negotiation. Withholding rates for the Mainland, Luxembourg, the Netherlands, the UAE and the UK; how the IRD issues a Certificate of Resident Status in 21 working days and when the substance Appendix bites; Hong Kong's MLI reservations; the missing US and Singapore treaties; CARF, CRS and Pillar Two.

Author: Ksenia Voronova — Lawyer, Family Office (https://wiki.private.law/en/authors/voronova)
Last modified: 2026-08-21T07:04:00.000Z
Canonical: https://wiki.private.law/en/hong-kong-tax-treaty-network
Topics: investments
Jurisdictions: hong-kong, china
Product tags: tax-regime, company, substance, compliance
Semantic tags: tax-regime, company, substance, compliance

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As at 20 August 2026 Hong Kong has 51 Comprehensive Double Taxation Agreements in force, eight more signed and awaiting entry into force, and 59 signed partners in total — the figure the [FSTB policy page](https://www.fstb.gov.hk/en/treasury/general/comprehensive-avoidance-of-double-taxation-agreement.htm) states as "as at July 2026, Hong Kong has signed CDTAs with 59 jurisdictions". Recounting from the [IRD's consolidated table](https://www.ird.gov.hk/eng/tax/dta_inc.htm) produces exactly the same 59: 51 in force plus the Maldives, Jordan, Rwanda, Norway, Kyrgyzstan, Barbados, Cyprus and Nigeria marked "Pending".

The network looks substantial, but its value is distributed very unevenly. Hong Kong itself withholds nothing on dividends and nothing on interest; its only withholding charge is on royalties, at 4.95% for an unassociated foreign corporate recipient. A Hong Kong treaty therefore runs almost entirely in one direction: it cuts the other side's tax on income flowing into Hong Kong and gives the partner almost nothing on the way out. That asymmetry explains both the network's historic narrowness and why serious partners were in no hurry to negotiate.

The practical failure point sits not in treaty text but in the Certificate of Resident Status. Without one no relief is claimed, and since 2023 the conditions for obtaining it are not what most advisory commentary describes. What follows is built on primary material: the IRD tables, treaty texts, the IR1313 forms, Hong Kong's MLI position as deposited with the OECD, and the government's own budget papers.

## The exact count: 51 in force, 8 signed, 17 negotiating

Hong Kong's network is counted three different ways, and even official government pages disagree.

| **Status** | **Count** | **Jurisdictions** |
| --- | --- | --- |
| In force | 51 | Chinese Mainland, Macao SAR, Japan, Korea, India, Indonesia, Malaysia, Vietnam, Cambodia, Brunei, Thailand, Pakistan, Bangladesh, New Zealand, United Kingdom, Ireland, France, Netherlands, Luxembourg, Belgium, Austria, Spain, Portugal, Italy, Czech, Hungary, Romania, Croatia, Latvia, Estonia, Finland, Malta, Liechtenstein, Switzerland, Jersey, Guernsey, Russia, Belarus, Serbia, Georgia, Armenia, Türkiye, UAE, Qatar, Kuwait, Bahrain, Saudi Arabia, South Africa, Mauritius, Canada, Mexico |
| Signed, not in force | 8 | Maldives \(26.05.2025\), Jordan \(04.09.2025\), Rwanda \(09.10.2025\), Norway \(16.12.2025\), Kyrgyzstan \(02.03.2026\), Barbados \(19.03.2026\), Cyprus \(12.06.2026\), Nigeria \(13.07.2026\) |
| Negotiations commenced or scheduled | 17 per IRD / 16 per FSTB | Germany, Israel, Lithuania, North Macedonia, Slovenia, Ukraine, Azerbaijan, Kazakhstan, Mongolia, Turkmenistan, Laos, Philippines, Oman, Morocco, Cabo Verde, Cameroon, Venezuela |

The first discrepancy is internal to the government. FSTB says "16 jurisdictions"; the [IRD negotiations table](https://www.ird.gov.hk/eng/tax/dta3.htm) names 17. Both pages are official and both are dated mid-2026. The likely cause is Kazakhstan, whose first round is scheduled for 24–28 August 2026 and therefore lies in the future — except that FSTB's own wording, "commenced / scheduled", covers precisely that case. There is no single authoritative Hong Kong figure for negotiations in progress.

The second discrepancy is temporal. In the [Budget Speech of 25 February 2026](https://www.budget.gov.hk/2026/eng/pdf/e_budget_speech_2026-27.pdf) the Financial Secretary put the total at 55 signed CDTAs. In the five months since, Kyrgyzstan, Barbados, Cyprus and Nigeria were added. Four signings in 2024, four in 2025 and four already by mid-July 2026 make this the densest three-year run since 2010, when twelve agreements were signed in a single year.

The third distinction is the one that costs money. A treaty in force is not the same as a treaty in effect. The Türkiye CDTA entered into force on 30 January 2026 but applies to Hong Kong profits tax only from the year of assessment 2027/2028, that is from 1 April 2027. Armenia and Bahrain entered into force during 2025 and apply from 2026/2027. Two to three years routinely separate the three dates — signature, entry into force, and first application.

## Why the network was narrow, and what opened it

The standard explanation is territoriality: Hong Kong taxes only Hong Kong-source income, double taxation from the Hong Kong side is rare, so treaties matter less. True, but incomplete — and it does not survive a look at the dates.

In the SAR's first twelve years, from 1997 to March 2010, Hong Kong signed five comprehensive agreements: Belgium \(2003\), Thailand \(2005\), the Chinese Mainland \(2006\), Luxembourg \(2007\) and Vietnam \(2008\). In the ten months that followed, it signed twelve: Brunei, the Netherlands, Indonesia, Hungary, Kuwait, Austria, the United Kingdom, Ireland, Liechtenstein, France, Japan and New Zealand.

The turning point was a statutory amendment, not an economic shift. As the [IRD's own 2010 press release](https://www.ird.gov.hk/eng/ppr/archives/10051201.htm) states, before it the department "could not adopt the OECD latest version of EoI provision due to the legal constraint on the information gathering power of the Inland Revenue Department" — the IRD had no power to gather taxpayer information it did not need for its own purposes. While Hong Kong could not sign the OECD exchange-of-information article, serious partners declined to negotiate at all. The Inland Revenue \(Amendment\) Ordinance 2010 removed the constraint, and the queue formed within months. The narrowness was a defect of powers, not a philosophy of tax.

A second reversal changed the logic of demand. Territoriality once meant a Hong Kong company rarely needed a treaty. Today foreign passive income — dividends, interest, IP income, disposal gains — falls within the FSIE regime and is exempt only where the entity satisfies an economic substance requirement: premises, people, expenditure and decision-making in Hong Kong. The same substance is what a treaty partner will demand before accepting the company as beneficial owner of the income. [Economic substance](https://wiki.private.law/en/economic-substance) and treaty relief have stopped being separate exercises: the evidence is assembled once and used in both directions.

## Certificate of Resident Status: what the IRD actually tests

The certificate is issued by Hong Kong's competent authority — the Commissioner of Inland Revenue, through the Tax Treaty Section. The [target is 21 working days](https://www.ird.gov.hk/eng/faq/dta_cor.htm) from receipt of a properly completed application, and that window covers not only issuance but also a decision to seek further information or to refuse. There is no fee, and a single application may cover up to three calendar years.

The point most commentary gets wrong: since 12 June 2023 the IRD issues the certificate "on the basis of the plain definition of 'resident'" in the relevant treaty and, as the [IRD press release](https://www.ird.gov.hk/eng/ppr/archives/23060801.htm) puts it, a company incorporated in Hong Kong "is in general not required to provide full details of its establishment and business activities in the revised forms". For a Hong Kong-incorporated company there is, as a general rule, no management-and-control examination at the certificate stage — the test is absorbed into the treaty definition of a resident as one "incorporated in Hong Kong".

The form's architecture confirms it. [IR1313B \(07/2025\)](https://www.ird.gov.hk/eng/pdf/ir1313b_e.pdf) asks little in its main body: years of claim, nature and amount of the income, name and address of the beneficial owner, place of incorporation, Hong Kong address, nature of business, location of headquarters and main branches, and a table of how many directors, senior managers and other staff have a fixed place of residence in Hong Kong versus outside it. The substance questionnaire is exiled to an Appendix, mandatory in only two cases: the applicant was incorporated outside Hong Kong \(a re-domiciled company excepted\) — or the claim is made under the Hong Kong–Japan treaty. Japan is singled out by name among 51 partners.

Where the Appendix does apply, the depth changes abruptly. Its eleven items ask whether all income is passive or non-Hong Kong sourced; where business is normally carried on, with the address of each establishment by country; a staff table with duties by country; the Hong Kong business commencement date reconciled against the Business Registration Office and the Companies Registry, with reasons for any mismatch; a list of Hong Kong employees with HKID numbers and remuneration; where management and control was exercised and, where more than one place, which was central; for each director, nationality, residential address, key responsibilities and where those duties were performed; for each board meeting, the date, attendees, venue and the substance of resolutions passed; a full account of how, where and by whom strategic policy is formulated, business directions determined, work plans set, financing decided and performance evaluated; the principal Hong Kong bankers and the number of accounts held; and the nature of the Hong Kong permanent establishment with fixed-asset values and closing cash balances from the last statement of financial position. The classic central-management-and-control test lives here — for a foreign company managed from Hong Kong, not for a Hong Kong one.

Since 10 November 2025 the certificate under the Mainland Arrangement is digital rather than paper: a PDF delivered to the applicant's ITP or BTP message inbox, which the Mainland authority authenticates by uploading it to the [e-Proof portal](https://www.eproof.gov.hk/en/verification). Every other treaty still produces a paper certificate by post. A further Mainland feature: under the administrative arrangement recorded in notes exchanged on 16 March and 15 April 2016, a certificate issued for a given calendar year also evidences resident status for the two succeeding years, absent a change of circumstances.

Re-domiciled companies joined the list of eligible applicants in 2025, following the launch of Hong Kong's company re-domiciliation regime. Such a company applies once the procedure is complete, attaching the certificate of re-domiciliation and evidence of deregistration in its former place of incorporation — and it does not complete the Appendix.

One limit is worth internalising before filing: the certificate does not guarantee relief. The IRD states plainly that the treaty partner decides, and that where relief is refused the only route is the mutual agreement procedure through Hong Kong's competent authority. The residence mechanics themselves are set out in [Hong Kong tax residence and the Certificate of Resident Status](https://wiki.private.law/en/hong-kong-tax-residence).

## Rates under the treaties that matter

The table reproduces the [official IRD rate schedule](https://www.ird.gov.hk/eng/tax/dta_rates.htm). Dividends are shown as "qualifying company / other cases"; a dash means the rate is not capped by the treaty or the tax does not exist.

| **Partner** | **Dividends** | **Interest** | **Royalties** | **Effective from** |
| --- | --- | --- | --- | --- |
| Chinese Mainland | 5 / 10 | 7 | 5 / 7 | YA 2007/2008 |
| Luxembourg | 0 / 10 | — | 3 | YA 2008/2009 |
| Netherlands | 0 / 10 | — | 3 | YA 2012/2013 |
| United Kingdom | 0 / 15 | domestic rate | 3 | YA 2011/2012 |
| United Arab Emirates | 5 | 5 | 5 | YA 2016/2017 |
| Switzerland | 0 / 10 | — | 3 | YA 2013/2014 |
| Japan | 5 / 10 | 10 | 5 | YA 2012/2013 |
| Ireland | — | 10 | 3 | YA 2012/2013 |
| Macao SAR | 5 / 5 | 5 | 3 | YA 2021/2022 |
| Russia | 0 / 5 | — | 3 | YA 2017/2018 |
| India | 5 | 10 | 10 | YA 2019/2020 |
| Türkiye | 5 / 10 | 7.5 / 10 | 7.5 / 10 | YA 2027/2028 |
| Singapore | no CDTA | no CDTA | no CDTA | — |
| United States | no CDTA | no CDTA | no CDTA | — |

One detail falls out of that table and is almost never noticed. Hong Kong's own royalty charge on an unassociated foreign corporation is 4.95% — 30% deemed assessable profits at 16.5% — rising to 16.5% where the recipient is an associate and the intellectual property was previously owned in Hong Kong. The royalty caps in the treaties with Austria, Ireland, Liechtenstein, Luxembourg, Malta, the Netherlands, Russia, Switzerland, Finland, Macao, Cyprus and the United Kingdom are 3%; with Jersey and Guernsey, 4%. In those cases the treaty cuts Hong Kong's own tax rather than the partner's — the one place where the network costs Hong Kong revenue. The general mechanics are covered in [withholding tax: source, rates and treaty relief](https://wiki.private.law/en/withholding-tax).

## The Mainland Arrangement: 5%, and what it costs to get there

The 2006 Arrangement with its five protocols is the centre of the network and, for many groups, the whole reason the structure sits in Hong Kong at all. The [IRD consolidated text](https://www.ird.gov.hk/eng/pdf/Consolidated_Text_Mainland_HKSAR.pdf) sets the terms precisely.

Article 10\(2\)\(1\): 5% on dividends where the beneficial owner is a company **directly** holding at least 25% of the capital of the payer; 10% in all other cases. Article 11\(2\): interest at 7%. Article 12\(2\): royalties at 7%, reduced to 5% for an aircraft and ship leasing business under the Fourth Protocol amendment, in force since 29 December 2015.

The arithmetic here is rarely spelled out. China's domestic withholding rate on dividends, interest and royalties paid to a non-resident is 10%. The treaty's 10% "other cases" dividend rate therefore delivers nothing at all: the only real dividend benefit is the 5%, and it requires a direct 25% holding. On interest and royalties the treaty saves three percentage points, from 10% to 7%. Three points rarely justifies a holding layer; five points on dividends does.

The 25% is a treaty condition. The twelve-month holding requirement is not in the treaty at all — it comes from Mainland domestic guidance, specifically the Announcement of the State Taxation Administration on Matters Concerning "Beneficial Owners" in Tax Treaties, known as STA Circular 2018 No. 9 and effective from 1 April 2018. It provides a dividends safe harbour where the applicant is itself the government of the other contracting party, a company resident and listed there, or a resident individual — or is 100% directly or indirectly held by such persons throughout the twelve consecutive months before the dividend. Article 4 adds a derivative-benefit rule: where the applicant does not itself qualify but a 100% holder does and is entitled to the same or a better rate, the status passes to the applicant.

That mechanism is wired directly into Hong Kong procedure. The [IRD's certificate page](https://www.ird.gov.hk/eng/tax/dta_cor.htm) instructs that where the claim concerns dividends falling within Article 3 or 4 of Announcement 9, Part 2 of the Appendix to form IR1313A must be completed. Hong Kong has built the Chinese beneficial-owner test into its own application form — an unusual case of one tax administration administering another's domestic rules.

The anti-abuse layer here is bilateral, not multilateral. The Fifth Protocol, signed on [19 July 2019](https://www.info.gov.hk/gia/general/201907/19/P2019071900850.htm) and in force from 6 December 2019, inserted Article 24A, "Entitlement to Benefits" — a principal purpose test in standard OECD wording: no benefit where it is reasonable to conclude that obtaining it was one of the principal purposes of the arrangement. In Hong Kong the Fifth Protocol applies to income in years of assessment beginning on or after 1 April 2020; in the Mainland, to taxable years from 1 January 2020. Article 25 separately preserves each side's right to apply its own anti-avoidance law, so the Chinese GAAR operates on top of the treaty test rather than instead of it. The logic of both tests is set out in [GAAR and the principal purpose test](https://wiki.private.law/en/gaar-ppt).

## The MLI: signed, and almost entirely reserved out

Hong Kong participates in the MLI through the PRC. China signed the Convention on 7 June 2017 and on 25 May 2022 deposited with the OECD its instrument of approval covering Hong Kong's agreements; the MLI entered into force for China, including Hong Kong, on 1 September 2022.

Hong Kong's [deposited position](https://www.oecd.org/content/dam/oecd/en/topics/policy-sub-issues/beps-mli/beps-mli-position-hong-kong-instrument-deposit.pdf) lists 39 Covered Tax Agreements — materially fewer than the network as a whole. Of the 51 treaties in force, the IRD table shows 31 actually modified by the MLI. Four more — Italy, Kuwait, Mexico and Vietnam — sit at "Pending". Three partners, Brunei, Cambodia and Switzerland, have not listed Hong Kong at all. The remainder are marked "N/A": their texts already contain the anti-BEPS measures, so nothing runs through the MLI.

The Mainland Arrangement does not appear among the 39. Hong Kong's single most important treaty is not a Covered Tax Agreement at all — its principal purpose test arrived through the Fifth Protocol, not the Convention.

Substantively Hong Kong took the minimum standards and reserved out of nearly everything else:

- Article 3 \(transparent entities\) — reserved in its entirety.
- Article 4 \(dual-resident entities; replacing the tie-breaker with a MAP determination\) — reserved in its entirety. The legacy tie-breakers in Hong Kong's treaties are untouched.
- Article 5 \(methods for eliminating double taxation\) — reserved in its entirety.
- Article 6 \(preamble\) — adopted as a minimum standard; the optional Article 6\(3\) was also chosen.
- Article 7 \(PPT\) — adopted as a minimum standard. The Article 7\(15\)\(b\) reservation is claimed only for Belarus and Pakistan, whose texts already contain a PPT equivalent. Hong Kong did not opt for the simplified limitation-on-benefits provision.
- **Article 8 \(dividend transfer transactions\) — reserved in its entirety.** The 365-day minimum holding period for reduced dividend withholding did not reach Hong Kong's treaties through the MLI.
- Articles 9, 10 and 11 — reserved in their entirety.
- **Articles 12, 13, 14 and 15 \(artificial avoidance of permanent establishment status through commissionnaire arrangements, specific activity exemptions and contract splitting\) — all reserved in their entirety.** The MLI's widening of the PE concept does not touch Hong Kong's treaties.
- Article 16 \(mutual agreement procedure\) — adopted as a minimum standard.
- Article 17 \(corresponding adjustments\) — reserved, since an Article 9\(2\) equivalent already appears in all 39 agreements.
- Part VI \(mandatory binding arbitration\) is absent from the position entirely: Hong Kong did not opt in.
The conclusion runs against the usual account. "The MLI rewrote Hong Kong's treaties" is wrong. It did two things: it inserted the anti-abuse preamble and principal purpose test, and it tightened the mutual agreement procedure. Everything else — permanent establishment, tie-breakers, dividend holding periods, transparent entities — remains exactly as the bilateral texts left it. What the PPT does deliver is decisive, though: it applies across all 39 covered agreements plus the Mainland via Article 24A, and it defeats the classic conduit — a Hong Kong layer without functions, people or decisions loses relief regardless of any certificate of residence. The broader treatment is in [the MLI and treaty shopping](https://wiki.private.law/en/mli-treaty-shopping).

One technical point explains the drawn-out timetable: Hong Kong made the Article 35\(7\)\(a\) reservation, under which modifications to a given treaty take effect only 30 days after both sides notify the Depositary that internal procedures are complete. Hence four agreements still "Pending" four years after the MLI entered into force.

## What Hong Kong does not have: the US, Singapore, Germany

Three absences shape the network more than most of its presences.

**The United States.** There is no comprehensive treaty and no negotiation. The one substantive instrument was in fact withdrawn: the [IRD's shipping income agreements list](https://www.ird.gov.hk/eng/tax/dta_ship.htm) shows the 1989 agreement with the USA carrying the note that "in October 2020, the USA announced the termination of the Shipping Income Agreement with the Hong Kong Special Administrative Region with effect from 1 January 2021". What survives is a single instrument: the [tax information exchange agreement](https://www.ird.gov.hk/eng/tax/dta_tiea_agreement.htm) signed 25 March 2014 and in force since 20 June 2014. The relationship is now maximally asymmetric — information flows, relief does not. US-source dividends into a Hong Kong holding company bear the full 30% domestic rate, and no route inside the Hong Kong network changes that.

**Singapore.** Here almost all secondary literature is wrong. There is no comprehensive agreement: Singapore appears neither on the in-force list nor among the signed. The only instrument is an [Airline and Shipping Income Agreement](https://www.ird.gov.hk/eng/tax/dta_air_ship.htm) signed 28 November 2003 and in force from 30 December 2004, covering nothing but the profits of airline and shipping enterprises. Asia's two largest financial centres, with enormous reciprocal investment, have no treaty base between them. The practical damage is contained — Singapore withholds nothing on dividends, Hong Kong withholds nothing on dividends or interest — so the friction lands on interest, royalties, permanent establishment and dual-residence questions. That fork is worked through in [Hong Kong company, Singapore resident](https://wiki.private.law/en/hong-kong-company-singapore-resident).

**Germany.** Europe's largest economy is absent, though negotiations are formally listed as open: the IRD table records a first round on 16–20 June 2014 and a second on 2–6 March 2015, and nothing since. Eleven years without a third round is a freeze, not a process. Only narrow air services \(1997\) and shipping \(2003\) agreements operate between them.

## Information exchange is far wider than the treaty network

Hong Kong's relief network and its information network are structures of different size, and the second is roughly twice the first.

Exchange on request runs through three channels: CDTAs, TIEAs and the Convention on Mutual Administrative Assistance in Tax Matters, in force for Hong Kong since 1 September 2018. There are seven TIEAs: Denmark, the Faroes, Greenland, Iceland, Norway and Sweden — all signed as a single Nordic package on 22 August 2014 — plus the United States.

Automatic exchange is the widest layer of all. Accession to the Convention allowed the [Inland Revenue \(Amendment\) \(No. 2\) Ordinance 2019](https://www.ird.gov.hk/eng/tax/dta_aeoi.htm) to raise the number of reportable jurisdictions from 75 to 126 with effect from 1 January 2020; the [Schedule 17E list](https://www.ird.gov.hk/eng/tax/aeoi/rpt_jur.htm) now runs to 129, with Ecuador, Oman and Thailand added for a first information period of 2025. The comparison speaks for itself: 129 jurisdictions receive data on Hong Kong accounts while 51 grant treaty relief. Oman reached the reportable list before it completed a first round of treaty negotiation. The standard itself is covered in [the CRS overview](https://wiki.private.law/en/crs-overview).

Country-by-country reporting has operated since the [Inland Revenue \(Amendment\) \(No. 6\) Ordinance 2018](https://www.ird.gov.hk/eng/tax/dta_cbc.htm) commenced on 13 July 2018: the threshold is EUR 750 million of consolidated group revenue, or HK$6.8 billion; the primary filing obligation falls on a Hong Kong-resident ultimate parent, with a secondary obligation on Hong Kong entities of foreign-parented groups.

The next layer is already dated. The Inland Revenue \(Amendment\) \(Automatic Exchange of Information\) Ordinance 2026 was gazetted on 26 June 2026 and comes into operation on 1 January 2027. The Inland Revenue \(Amendment\) \(Crypto-Asset Reporting Framework and Amended Common Reporting Standard\) Bill 2026 was gazetted on 22 May 2026 and received its first reading on 3 June 2026; subject to passage, CARF applies from 1 January 2027 and the amended CRS from 1 January 2028. The [FSTB consultation launched on 9 December 2025](https://www.info.gov.hk/gia/general/202512/09/P2025120900283.htm) and closed on 6 February 2026 pointed to a first automatic exchange of crypto-asset data in 2028.

## Pillar Two: treaties stop being about the rate

Hong Kong legislated its own global minimum. The bill passed the Legislative Council on [28 May 2025](https://www.info.gov.hk/gia/general/202505/28/P2025052800539.htm), the Inland Revenue \(Amendment\) \(Minimum Tax for Multinational Enterprise Groups\) Ordinance 2025 was enacted on 6 June 2025, and it [applies to fiscal years beginning on or after 1 January 2025](https://www.ird.gov.hk/eng/tax/bus_beps.htm). The threshold is EUR 750 million of consolidated revenue in at least two of the four preceding fiscal years. It introduces the income inclusion rule, the undertaxed profits rule and the Hong Kong minimum top-up tax, the HKMTT taking priority over the other two. Notification is due within six months of the end of the reporting fiscal year and the return within 15 months, or 18 for a transition year. The government projects roughly HK$15 billion of additional annual revenue from 2027-28.

For a large group this changes what a treaty is worth. The headline rate stops being a variable: wherever profit sits, it will be brought to 15% — by the HKMTT in Hong Kong or by an income inclusion rule at the parent. Treaty value shifts to the two things Pillar Two does not neutralise: withholding tax deducted in the payer's country, and protection against a permanent establishment. Withholding tax counts toward covered taxes, so five surplus percentage points of Chinese dividend tax remain a genuine loss even after the minimum applies. What no longer works is the old design of parking profit at Hong Kong's 8.25% for a group above EUR 750 million. The regime's detail is in [Pillar 2 in Hong Kong](https://wiki.private.law/en/hong-kong-pillar-two-15). Below the threshold nothing changes, and the treaty network remains the primary instrument.

## The road to 2028

Eight signed agreements are waiting to enter into force, and the queue is peculiar. The most recent order under section 49 of the Inland Revenue Ordinance — the instrument that gives a treaty domestic legal effect in Hong Kong — is dated 22 October 2024, when five agreements were processed in one batch: Armenia, Bahrain, Bangladesh, Croatia and Türkiye. No new order has been made in the almost twenty-two months since, while eight agreements have been signed. All eight sit in the IRD table marked "In progress". Hong Kong evidently processes treaties into domestic law in batches, and the next batch is overdue; at the usual cadence the front of the queue — the Maldives, Jordan, Rwanda and Norway — enters into force during 2027 and first applies from the year of assessment 2028/2029.

Of the seventeen negotiation tracks, the nearest event is the first round with Kazakhstan, scheduled for 24–28 August 2026. First rounds were held during 2026 with Oman \(5–9 January\), Slovenia \(26–30 January\) and Laos \(23–27 March\), and a second round with Morocco \(13–17 July\) — the only partner to reach a second round in eleven years. Germany, Israel, Lithuania, North Macedonia, Ukraine, Azerbaijan, Turkmenistan, Cabo Verde, Mongolia and Venezuela are recorded with completed first rounds and no follow-up.

The Türkiye treaty begins applying to Hong Kong profits tax on 1 April 2027. CARF switches on 1 January 2027, the amended CRS on 1 January 2028, and the new AEOI administrative framework on 1 January 2027. No changes to the certificate of residence rules have been announced over that horizon.

## Common mistakes

**Assuming a Hong Kong–Singapore treaty exists.** It does not, and a "Hong Kong holdco, Singapore opco" structure priced on treaty rates rests on nothing: only each side's territorial regime and unilateral reliefs are in play.

**Confusing entry into force with first application.** The Türkiye treaty has been in force since 30 January 2026 but applies to Hong Kong tax only from 1 April 2027. A transaction planned around an "in force" treaty falls into an eighteen-month gap.

**Assembling a full substance file for a Hong Kong company's certificate.** Since 12 June 2023 the IRD generally does not require it from a Hong Kong-incorporated applicant. The full questionnaire is mandatory only for foreign-incorporated companies and for any applicant claiming under the Japan treaty.

**Treating the certificate as sufficient.** It evidences residence, not entitlement. The Mainland separately applies the Announcement 9 beneficial-owner test and Article 24A; the other partners across the 39 covered agreements apply the principal purpose test. A refusal on the merits is resolved only through the mutual agreement procedure.

**Building a holding layer for the 10% Chinese dividend rate.** China's domestic rate is already 10%; there is no benefit in that line. The gain is the 5% on a direct 25% holding — and that runs through the beneficial-owner test and the twelve-month holding rule in Mainland guidance.

**Believing the MLI hardened Hong Kong's treaties across the board.** Hong Kong reserved out of Articles 3, 4, 5, 8, 9, 10, 11, 12, 13, 14 and 17 and declined mandatory arbitration. What was actually added is the preamble, the PPT and the mutual agreement procedure.

## Scenarios

**Repatriating Mainland dividends through a Hong Kong holding company.** Hold at least 25% of the capital directly, for at least twelve months before the distribution. Test whether the structure lands in the Article 3 safe harbour or the Article 4 derivative benefit of Announcement 9; if so, complete Part 2 of the Appendix to IR1313A. Order the digital certificate early — it covers the claim year and the two following. In parallel, assemble the Article 24A evidence: board resolutions taken in Hong Kong, staff, premises, banking.

**Claiming relief where the Appendix applies** — a foreign-incorporated company managed from Hong Kong, or any applicant under the Japan treaty. Prepare minutes of every board meeting with venue and substance of resolutions, a staff table by country, an account of who formulates strategy and where, and fixed-asset and cash figures from the latest statement of financial position. File through the BTP or TRP; the target is 21 working days.

**Confirming whether a treaty applies to this year's transaction.** Check three dates in the IRD table — signature, section 49 order, entry into force — and then the "Effective From" column separately. For the eight agreements in the 2025–2026 queue, the answer for the current year is no.

**Planning a royalty payment out of Hong Kong.** Compare the 4.95% domestic charge with the partner's treaty cap: Austria, Ireland, Liechtenstein, Luxembourg, Malta, the Netherlands, Russia, Finland, Switzerland, Macao and the United Kingdom cap at 3%, below the domestic rate. Check separately whether the recipient is an associate receiving royalties for IP previously owned in Hong Kong — then the base is 100% and the rate 16.5%.

**Assessing a group above EUR 750 million of revenue.** The rate stops being a planning variable: the HKMTT brings the effective burden to 15% for fiscal years beginning on or after 1 January 2025. Treaties still earn their place on withholding tax and permanent establishment protection; notification is due six months after year end, the return at fifteen.

**Dealing with a US counterparty.** There is no treaty protection and none in prospect. US-source dividends bear the full rate, the shipping agreement was terminated with effect from 1 January 2021, and the only live instrument is the 2014 TIEA, which moves information rather than relief. US exposure has to be planned outside the Hong Kong treaty perimeter.

> 🍓 Hong Kong has 51 CDTAs in force, eight signed and queuing, and 59 signed partners in total — but the network runs almost entirely one way, because Hong Kong's only withholding charge is on royalties. The practical bottleneck is not treaty text but the residence certificate: since 12 June 2023 a Hong Kong-incorporated company obtains one on the strength of incorporation within a 21-working-day target, and the full management-and-control questionnaire is mandatory only for foreign-incorporated applicants and for anyone claiming under the Japan treaty. The Mainland Arrangement remains the core of the network, but its only real benefit is the 5% dividend rate on a direct 25% holding, gated by the Chinese beneficial-owner test in Announcement 9 and the Article 24A principal purpose test. Hong Kong joined the MLI through the PRC, covered 39 agreements with it and reserved out of nearly everything except the preamble, the PPT and the mutual agreement procedure — and the Mainland Arrangement is not a covered agreement at all. The information network is already twice the size of the relief network, 129 reportable jurisdictions against 51, with CARF and the amended CRS arriving in 2027 and 2028. For groups above EUR 750 million of revenue, Pillar Two has stripped the value out of a low rate, leaving treaties to earn their keep on withholding tax and permanent establishment protection.

## Q/A

### **How many tax treaties does Hong Kong have, and which figure should be relied on?**

Rely on the status rather than the headline total: 59 signed, 51 in force, eight awaiting entry into force. Seven TIEAs and the narrow air services and shipping agreements are counted separately and confer no relief on dividends, interest or royalties. FSTB and the IRD disagree on negotiations in progress: 16 against 17 jurisdictions named individually.

### **What does a Hong Kong company need to obtain a Certificate of Resident Status?**

Form IR1313B, a copy of the certificate of incorporation, details of the nature of the business, and a staff table split between those with a fixed place of residence in Hong Kong and those without. The full central-management-and-control questionnaire is required only from a company incorporated outside Hong Kong, or from any applicant claiming under the Japan treaty. There is no fee, the target is 21 working days, and one application covers up to three calendar years. Under the Mainland Arrangement the certificate has been digital since 10 November 2025, verifiable through the e-Proof portal.

### **Why is there no US treaty, and what does that mean in practice?**

There has never been a comprehensive agreement, and the old shipping income agreement was terminated by the United States with effect from 1 January 2021. Only the 2014 tax information exchange agreement survives. In practice that means the full 30% domestic rate on US-source dividends with no treaty reduction; US exposure is either structured outside the Hong Kong perimeter or accepted as a cost.

### **Did the MLI break the old Hong Kong structures?**

Through one provision, yes. The principal purpose test applies across the 39 covered agreements and, via Article 24A of the Fifth Protocol, to the Mainland Arrangement, and it denies relief to a layer without functions, people or decisions regardless of any residence certificate. The rest of the MLI Hong Kong reserved out of: the widened permanent establishment definition, the replacement dual-residence tie-breaker, the 365-day dividend holding period and mandatory arbitration do not apply to Hong Kong's treaties.

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## FAQ

### How many tax treaties does Hong Kong have, and which figure should be relied on?

Rely on the status rather than the headline total: 59 signed, 51 in force, eight awaiting entry into force. Seven TIEAs and the narrow air services and shipping agreements are counted separately and confer no relief on dividends, interest or royalties. FSTB and the IRD disagree on negotiations in progress: 16 against 17 jurisdictions named individually.

### What does a Hong Kong company need to obtain a Certificate of Resident Status?

Form IR1313B, a copy of the certificate of incorporation, details of the nature of the business, and a staff table split between those with a fixed place of residence in Hong Kong and those without. The full central-management-and-control questionnaire is required only from a company incorporated outside Hong Kong, or from any applicant claiming under the Japan treaty. There is no fee, the target is 21 working days, and one application covers up to three calendar years. Under the Mainland Arrangement the certificate has been digital since 10 November 2025, verifiable through the e-Proof portal.

### Why is there no US treaty, and what does that mean in practice?

There has never been a comprehensive agreement, and the old shipping income agreement was terminated by the United States with effect from 1 January 2021. Only the 2014 tax information exchange agreement survives. In practice that means the full 30% domestic rate on US-source dividends with no treaty reduction; US exposure is either structured outside the Hong Kong perimeter or accepted as a cost.

### Did the MLI break the old Hong Kong structures?

Through one provision, yes. The principal purpose test applies across the 39 covered agreements and, via Article 24A of the Fifth Protocol, to the Mainland Arrangement, and it denies relief to a layer without functions, people or decisions regardless of any residence certificate. The rest of the MLI Hong Kong reserved out of: the widened permanent establishment definition, the replacement dual-residence tie-breaker, the 365-day dividend holding period and mandatory arbitration do not apply to Hong Kong's treaties.

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## Factual claims

- In the SAR's first twelve years, from 1997 to March 2010, Hong Kong signed five comprehensive agreements: Belgium (2003), Thailand (2005), the Chinese Mainland (2006), Luxembourg (2007) and Vietnam (2008).
- Re-domiciled companies joined the list of eligible applicants in 2025, following the launch of Hong Kong's company re-domiciliation regime.
- The 2006 Arrangement with its five protocols is the centre of the network and, for many groups, the whole reason the structure sits in Hong Kong at all.
- Article 10(2)(1): 5% on dividends where the beneficial owner is a company directly holding at least 25% of the capital of the payer; 10% in all other cases.
- The 25% is a treaty condition.
- Hong Kong's deposited position lists 39 Covered Tax Agreements — materially fewer than the network as a whole.
- The Mainland Arrangement does not appear among the 39.
- Exchange on request runs through three channels: CDTAs, TIEAs and the Convention on Mutual Administrative Assistance in Tax Matters, in force for Hong Kong since 1 September 2018.

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