Hong Kong and Cyprus enter into tax pact (with photos)
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Mr Hui said, "This is the 58th CDTA that Hong Kong has concluded and also the third one this year, signifying the HKSAR Government's ongoing achievements in expanding the CDTA network. To date, the current-term Government has signed 13 CDTAs. We will continue to actively seek to sign CDTAs with more tax jurisdictions to enhance the attractiveness of Hong Kong as a business and investment hub.
"This week, we announced the Action Plan to Promote the Development of Corporate Treasury Centres in Hong Kong, which sets out targeted strategies to elevate Hong Kong as a major base for corporate treasury centres. Continued expansion of our CDTA network is one of the key strategies. Going forward, we will focus on engaging economies along the Belt and Road. This will provide Hong Kong-based enterprises with greater tax certainty and avoidance of double taxation when expanding their businesses overseas."
At the meeting, Mr Hui highlighted to Ms Sophianou the advantages of Hong Kong as an international financial centre and its latest developments, including its rise to become the world's largest cross-boundary wealth management centre and the efforts made to build an international gold trading market in Hong Kong.
Mr Hui added, "Cyprus is a participant in the Belt and Road Initiative and an important trading partner of Hong Kong in Europe. This CDTA sets out the allocation of taxing rights between Hong Kong and Cyprus, which will enable investors to better assess their potential tax liabilities from cross-boundary economic activities and avoid double taxation. This will help promote bilateral trade and investment."
In accordance with this CDTA, any tax paid by Hong Kong residents in Cyprus will be allowed as a credit against the tax payable in Hong Kong in respect of the same income, subject to the provisions of the Inland Revenue Ordinance (Cap. 112) (IRO). Moreover, Cyprus' withholding tax rates for Hong Kong residents on royalties, currently at up to 10 per cent, will be reduced to 3 per cent.
The CDTA will come into force after completion of ratification procedures by both sides. In Hong Kong, the Chief Executive in Council will make an order under the IRO, which will be tabled at the Legislative Council for negative vetting. Details of the CDTA are available on the Inland Revenue Department's website.
Ends/Friday, June 12, 2026
Issued at HKT 17:50
Issued at HKT 17:50
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