A new comprehensive Double Taxation Agreement between the UK and the People's Republic of China was signed in London on 27 June 2011 by the Foreign Secretary and Mr Yang Jiechi, Minister of Foreign Affairs.
Welcoming the Agreement, the Foreign Secretary commented: 'This new treaty represents an important step towards the modernisation of the UK's tax treaty network and marks further progress in relations between the UK and China. It will encourage greater flows of cross border trade and investment which are vital for prosperity in both countries.'
The Agreement generally follows the Organisation for Economic Co-operation and Development (OECD) Model Double Taxation Convention. Important features of the new Agreement include a reduction in the dividend withholding tax rate to 5 per cent (down from 10 per cent) for direct investors; an updated capital gains article and a modern exchange of information article.
Follow the link below to see the text of the new Convention which will be published by the Stationery Office as soon as it is presented to Parliament for approval.
Go to Tax treaties signed/not in force
The Agreement enters into force once both countries have completed their legislative procedures. The provisions of the Agreement will then take effect from the following year.
HM Revenue & Customs
June 2011
