DT4906 - China: Dividends

The Chinese tax deducted from dividends at the agreement rate of 10 per cent qualifies for credit as a direct tax (see INTM164010 (c)).

The reduction to the above rate is not given where the dividend is effectively connected (see INTM153110 fifth sub-paragraph) with a permanent establishment or fixed base which the United Kingdom resident recipient has in China.

Where a Chinese company pays a dividend to a United Kingdom company which controls, directly or indirectly, at least 10 per cent of the voting power in the Chinese company, credit may also be given for the underlying tax (see INTM164010(d)) ( Article 23(2)(b)).