Market Taxation Guide - Hong Kong

13.12.2016

This Market Taxation Guide (Hong Kong) provides the following details:

  • Reference information about all taxes applied at source, through Clearstream Banking and its local depositories, to securities deposited in Clearstream Banking; and
  • Instructions for obtaining relief at source or a refund of withholding tax, where these are available, through Clearstream Banking.

New and improved tax information and procedures that become available will be included on an ongoing basis.

Important note:

This Market Taxation Guide (including any attachments and other links) is for informational purposes only and is not intended and should not be considered to be legal advice on any subject matter. Readers of this Market Taxation Guide, whether customers or otherwise, should not act or refrain from acting on the basis of any information included in this Market Taxation Guide without seeking appropriate legal or other professional advice.

Types of securities eligible in Clearstream Banking

  • Corporate bonds;
  • Government bonds;
  • Equities;
  • Chinese H shares: These shares are issued by companies based in mainland China and regulated by Chinese law but denominated in Hong Kong dollars and traded on the Hong Kong Stock Exchange; and
  • Stock Connect China A shares: These shares are Renminbi-denominated, issued by companies based in mainland China and are traded on Chinese stock exchanges.

Withholding tax

Holding restriction

Withholding
tax rate

Relief
at source

Quick
refund

Standard
refund

Corporate Bonds

No

0%

No withholding tax is imposed on interests paid on Hong Kong Corporate bonds in Clearstream Banking.

N/A

N/A

N/A

Government Bonds

No

0%

No withholding tax is imposed on interests paid on Hong Kong Government bonds in Clearstream Banking.

N/A

N/A

N/A

Equities

No

0%

No withholding tax is imposed on dividends paid on Hong Kong Equities in Clearstream Banking.

N/A

N/A

N/A

Chinese H shares

  No

  10% a

Clearstream Banking does not provide tax Relief at source, Quick or Standard refund services for the Hong Kong market.

No

No

No

Stock Connect China A shares

  No

  10% a

Clearstream Banking does not provide tax Relief at source, Quick or Standard refund services for the Hong Kong market.

No

No

No

a. The 10% tax is withheld by the issuing company or by its paying agent. No tax is withheld by Clearstream Banking.

Clearstream Banking does not provide tax Relief at source, Quick or Standard refund services for the Hong Kong market. Customers are advised to engage a local tax agent for all tax related matters according to market practice.

Capital gains tax

There is no capital gains tax withheld through Clearstream Banking on securities held in Clearstream Banking. Capital gains tax may however be payable on specific gains. Clearstream Banking does not assist in this regard. Please consult your tax advisor for further information.

Stamp Duty

  • Debt securities:

There is no stamp duty withheld through Clearstream Banking on securities held in Clearstream Banking. Stamp duty may however be payable on specific transactions. Clearstream Banking does not assist in this regard. Please consult your tax advisor for further information.

  • Equities:

There are three types of stamp duty on Hong Kong equities applicable in the Hong Kong market:

  • Stock transaction Stamp Duty,
  • Contract Notes Stamp Duty,
  • Transfer Deed Stamp Duty.

Details of the Stamp duty applied are available in the Settlement process section of the Market Profile – Hong Kong.

Clearstream Banking does not assist in this regard. Please consult your tax advisor for further information.