DT4907 - China: Technical fees

Technical fees arising in China and paid to a resident of United Kingdom may be taxed in both countries under the provisions of Article 13 (see INTM153140). The Chinese tax is limited to 10 per cent of the 'adjusted amount' of the fees. The 'adjusted amount' is defined as 70 per cent of the gross amount of the fees.

However, if the technical fees are effectively connected (see INTM153110 fifth sub-paragraph) with a permanent establishment which the United Kingdom resident has in China, or with a fixed base from which the United Kingdom resident performs independent personal services, such fees are taxed under the Business profits Article (see INTM153080) or the Independent personal services Article (see INTM153160). For the method of calculating the amount of tax credit relief due see INTM168062.