01
Effective status
The agreement entered into force on 15 October 2012; it applies to Swiss taxes from 1 January 2013 and Hong Kong taxes from 1 April 2013. The Switzerland–China DTA does not extend to Hong Kong.
This editorial overview does not replace the official treaty and protocol, domestic law or a factual analysis of the income recipient.
02
Dividends
General limit 10%; 0% for a company holding at least 10%. Hong Kong domestic law generally imposes no withholding tax on dividends.
03
Interest
Treaty limit 0%; Hong Kong domestic law also generally imposes no withholding tax on interest.
04
Royalties
Treaty limit 3%.
05
Applying the treaty
The absence of Hong Kong withholding on dividends and interest does not remove the Swiss withholding and refund analysis. For royalties, residence evidence should be prepared before payment; beneficial ownership and the nature of the rights also require review. A treaty rate is a maximum source-state limit, not an automatic rate. Before payment, test residence, beneficial ownership, minimum holding and holding period, PPT, substance, domestic law and the relief-at-source, notification or refund procedure.
06
Practical sequence
- Determine residence and the relevant tax period
- Classify the income and beneficial recipient
- Test the holding, holding period, PPT and business purpose
- Prepare certificates, forms and substance evidence
- Coordinate withholding, notification or refund and MAP where needed
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