The double taxation agreement between Romania and Hong Kong.

Recent Law No. 204 of Nov. 7, 2016 ratified the Agreement between Romania and the Hong Kong Special Region to Avoid Double Taxation and Prevent Tax Evasion signed on Nov. 18, 2016 and effective January 1, 2017.

The Agreement is particularly important for all companies under Romanian law that count among their shareholders legal persons under Chinese law residing in the HK special region. In addition, the specificity of the Agreement is the fact that HK being a special region enjoys legal autonomy from China and consequently the previous and existing Romania-China Agreement did not apply “extensively” to HK.

Regarding the agreement we point out that the main rates provided for different types of income are as follows:

– 3% for dividends (with a minimum holding of Share Capital of 15%) or 5%;

-3% for royalties;

-3% for interest.

We remain available for further clarification