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UK and China sign new double taxation agreement

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A new comprehensive double taxation agreement between the UK and the People’s Republic of China was signed on 27 June.

The agreement generally follows the OECD Model Double Taxation Convention, HMRC said. Important features 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’.

The agreement, the text of which is available on the HMRC website, will enter into force once both countries have completed their legislative procedures, and the provisions will then take effect from the following year.