Tax services

Worldwide tax summaries Asian Tax and Advisory Webcast Series

China Tax/Business News Flash 

View this page in: 简体中文版 

Jul 2013, Issue 16

The New China-Netherlands Tax Treaty: A breakthrough in the treatment for capital gains beneficial to investors

On 31 May 2013, China and the Netherlands entered into a new double taxation agreement (DTA) and protocol to replace the existing DTA which has been in force since 1 January 1989. This new DTA generally follows the trend of new DTAs that China has concluded/re-negotiated in recent years. Furthermore, there is a breakthrough in the capital gains article in this new China-Netherlands DTA. Under the standard DTA, China has taxing rights on gains from the disposal of shares of a property-rich company and/or a Chinese non-property-rich company (the latter applicable only when certain shareholding threshold is met). The new article provides further treaty protection if the shares being disposed of are quoted shares listed in a recognised stock exchange provided that certain conditions are met. This treaty protection for quoted shares is new in China DTAs. From a China tax perspective, this puts Netherlands investors in a better tax position as compared with investors from other jurisdictions.

Other issues of China Tax/Business News Flash
Visit our Tax Library.
Peter Ng
China and Hong Kong Tax Leader
Tel: +[86] (21) 2323 1828 Email
Edwin Wong
Tel: +[86] (10) 6533 2100 Email
Charles Lee
China South Tax Leader
Tel: +[86] (755) 8261 8899 Email