Italy and Hong Kong – DTT


Italy Signs Double Taxation Treaty with Hong Kong: On 14 January 2013, both Hong Kong and Italy have entered into a Double Taxation Treaty, which is a move made, after both parties saw that these would be efficient in the prevention of income tax evasion and elimination of double taxation.

It sets out the taxing right of both countries and the tax rates that would have to be applied to certain types of passive income. Moreover, this agreement would seal further the economic and trade ties between these two places.

Brief of the Double Taxation Treaty between Hong Kong and Italy


Financial analysts see that the Double Taxation treaty will boost the economic rating of both countries as it helps investors better assess their potential tax liabilities along cross-border economic activities. Here is a list of some points that they have included in it:

  1. Hong Kong Airlines that have flights to Italy will need to pay taxes under Hong Kong’s corporate tax rate.
  2. International Shipping Transports earned by residents of Hong Kong, even if profits arise from Italy, will also be exempted from Italian tax rates because they will be paying their taxes in Hong Kong.
  3. Hong Kong residents that receive Italian dividends will also have a reduced tax dividend of 10 percent from the previous 20 percent.
  4. Interests that have to be taxed by contracting party will not exceed 12.5 percent of the amount of the interest and includes debt claims of every kind, may it or may it not be secured by a mortgage.
  5. Royalties will not be charged more than 15 percent of the gross amount of royalties and it will only apply to the payments for the right to use, use of, or copyright of scientific, literary, and artistic works like films, designs, models, and secret formulas.


Included in the Double Taxation Treaty is an article, which contains the guidelines on how the exchange of information should be executed in occasions when an individual is hinted to be violating tax rules.


However, the necessary procedure has to be strictly followed before any information could be disclosed by the Contracting parties, particularly the Government of the Italian Republic and the Government of the Hong Kong Special Administrative Region of the People’s Republic of China.


With these, Hong Kong has now signed 27 Comprehensive Agreement including that with Luxembourg, Czech Republic, France, China, Vietnam, Indonesia, Netherlands, United Kingdom, Malaysia, Switzerland, Mainland of China, Portugal, Austria, Japan, Ireland, Kuwait, Canada, Mexico, Malta, and Liechtenstein.