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Hong Kong – Latvia, the avoidance of double taxation agreement

Hong Kong – Latvia, the avoidance of double taxation agreement

It has been signed an agreement on avoidance of double taxation between Hong Kong and Latvia on 13 April, Riga. This is the 35th contract that Hong Kong has signed with its trading partners. The Treaty establishes a clear allocation of taxation rights between the two jurisdictions and it helps investors better assess their potential tax liabilities.

Hong Kong - Latvia

It has been signed an agreement on avoidance of double taxation between Hong Kong and Latvia on 13 April, Riga.

This is the 35th contract that Hong Kong has signed with its trading partners. The Treaty establishes a clear allocation of taxation rights between the two jurisdictions and it helps investors better assess their potential tax liabilities.

In the absence of an agreement on avoidance of double taxation the profits of Hong Kong companies which operate through a permanent establishment in Latvia, were taxed in both places if the income comes in Hong Kong. Similarly, revenues received Latvian residents in Hong Kong are subject to tax in Latvia.

Under the new agreement, the tax rate in Latvia for royalty (currently different rates to 23 per cent in some cases) will be reduced to zero percent for companies and a maximum of three percent in all other cases. The tax rate on dividends will be reduced to zero percent for companies and up to 10 percent in all other cases.

The avoidance of double taxation agreement between Hong Kong and Latvia also included an article in accordance with international standards for the exchange of information in tax matters.

The Agreement will enter into force after completion of ratification procedures on both sides.

Author: Sergey Panov
managing partner Finance Business Service
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