CONSULENZA ALLE IMPRESE – OLTRE LA VISIONE COMUNE

HONG KONG BECOMES TRANSPARENT

Was published in the official journal (Law No. 96/2015, published in OJ No. 155 of 7.07.2015) the law establishing a ratification and implementation of the agreement against double taxation between Hong Kong and Italy, signed on January 14, 2013.

Among the most important elements of the Convention there is certainly the provision in art. 26 of the said Convention of the exchange of information on request. This Exchange cannot be refused on the basis of the principle of banking secrecy.

The immediate effect of such a clause will be the cancellation of Hong Kong from the list of non-cooperative tax monitoring purposes. It should be remembered that the C.M. 38//2013 has clarified that, for the purposes of fiscal monitoring, collaborative Countries list includes all States that allow a proper exchange of information by means of a double taxation Convention to other agreements. With the entry into force of the Convention, therefore, the Hong Kong Special Administrative Region will be considered in all respects a collaborative Country.

With regard to the entry into force of this Convention shall be postponed to the date of notifying the other of the completion of the procedures required by its law for the entry into force of this agreement. The Italy has done its part. Now waiting for ratification by the communication of Hong Kong. Completed that process, certainly during the 2015, the Hong Kong Special Administrative Region will be considered in all respects a collaborative Country. Already from 2015 (2016) will produce the effects monitoring purposes.

This will not be the only effect of the entry into force of the Convention.

Hong Kong is included, even after the changes made by D.M. 27.04.2015 published in the OJ of 11.05.2015, D.M. 23.1.2002, issued for the discipline on the deductibility of costs from tax havens. His tenure in this list it was assumed was related to the non-entry into force of the Convention. Now there are all conditions for its cancellation.

Regarding the deductibility of costs arising from transactions with resident operators or localized to Hong Kong was noted the presence in the Convention of "non-discrimination clause". The presence of this conseete clause, even without the cancellation of Hong Kong by DM 23.1.2002, operate the deductibility of costs arising from transactions with residents thereof or located.

Probably, with the entry into force of the Convention, Hong Kong could be expunged even dalD. M. 4.5.1999, which locates in privileged taxation countries regarding the reversal of the burden of proof for the transfer of residence of natural persons, and D.M. 21.11.2001 enacted primarily for the discipline on controlled foreign companies under art. 167 of the tax code.

Residents in the Asian country can benefit from reduced withholding in the perception of interests, royalties and dividends of Italian source.

In particular, for those items of income it provides for the application of a withholding tax, which may not exceed:
-10% for dividends;
-12.5% for interest;
-15% for royalties.

Therefore, companies resident in Hong Kong, referring to passive income (dividends, interest and royalties) Italian source, benefit from the preferential rates provided for by the Convention in place of the more onerous rates laid down in the Italian legislation.

Taken from Fiscal Focus