Secretary for Financial Services and the Treasury Christopher Hui Ching-yu signs on behalf of the Hong Kong Special Administrative Region Government a comprehensive avoidance of double taxation agreement with Serbia on Aug 28, 2020. (PHOTO / HKSAR GOVT)

HONG KONG - The Hong Kong Special Administrative Region (HKSAR) government on Friday signed a tax agreement with Serbia, signifying its sustained efforts in expanding Hong Kong’s tax treaty network, a government spokesman said.

The CDTA also stipulates that Serbia's withholding tax rates for Hong Kong resident companies on dividends, interest and royalties will be capped at 10 percent

In a statement issued on Friday afternoon, the spokesman said Secretary for Financial Services and the Treasury Christopher Hui Ching-yu signed on behalf of the HKSAR government a comprehensive avoidance of double taxation agreement (CDTA) with Belgrade.

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"Serbia is one of the emerging economies participating in the Belt and Road Initiative, which brings about vast business opportunities,” Hui was quoted as saying in the statement.

“The CDTA will promote economic and trade connections between Hong Kong and Serbia, and offer additional incentives for the business sector of both sides to do business or make investments," he added.

Under the agreement, any tax Hong Kong companies pay in Serbia in accordance with the CDTA will be credited against their tax payable in Hong Kong on the same income, according to the statement.

Likewise, any tax Serbian firms pay in Hong Kong can be deducted from the tax payable on the same income in Serbia, it added.

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According to the statement, the CDTA also stipulates that Serbia's withholding tax rates for Hong Kong resident companies on dividends, interest and royalties will be capped at 10 percent.

Profits from international shipping transport earned by Hong Kong residents arising in Serbia will not be taxed in Serbia, it added.

The agreement will come into force after the completion of ratification procedures by both jurisdictions.

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