On 13 April 2016, Hong Kong and Latvia signed a double taxation agreement in Riga as part of Hong Kong’s efforts to expand its comprehensive double taxation agreements network.
The agreement also includes an article in line with the international standards on the exchange of information in tax matters and is set to come into effect upon completion of ratifications procedures from both sides.
In accordance to the provisions of the treaty, Latvian tax payments will be allowed as a credit against the tax payable in Hong Kong on the same profits and tax paid in Hong Kong will be allowed as credit against tax payable on the same income in Latvia.
In addition, the following withholding taxes will apply:
Dividends:
-
Reduced to 0% for companies
-
Capped at 10% in all other cases
Interest:
-
Reduced to 0% for companies
-
Capped at 10% in all other cases
Royalties:
-
Reduced to 0%
-
Capped at 3% in all other cases