New double tax treaties between China and the UK, Belgium and France

New double tax treaties between China and the UK as well as between China and Belgium entered into force in December 2013. On 26 November 2013, the government of China and France signed a new Double Taxation Treaty, which could take effect from as early as 1 January 2015.

China and UK

The new double tax treaty (New DTA) between China and the UK entered into force on 13 December 2013 replacing the treaty and protocol dating from 1984 and 1996, respectively. The New DTA has effect: a) in China, in respect of income tax arising in any tax year beginning on or after 1 January 2014; b) in the UK, in respect of income tax and capital gains tax, for any year of assessment beginning on or after 6 April 2014, and in respect of corporation tax, for any financial year beginning on or after 1 April 2014.

The new DTA provides for lower levels of dividend and royalties withholding tax, and also provides for the exclusion of certain capital gains on minority shareholdings from capital gains tax. It also tightens up the DTA permanent establishment (PE) provisions, allowing for greater certainty in their application.

China and Belgium

The new double tax treaty (New DTA) between China and the Belgium entered into force on 29 December 2013 replacing the treaty and protocol dating from 1985. The new DTA takes effect from 1 January 2014.

The New DTA has effect a) in China, on income tax, including any prepayments on these taxes and any surcharges on these taxes and prepayments; b) in Belgium, on income tax, tax on legal entities, tax on non-residents and the supplementary crisis contribution, including any prepayments on these taxes and any surcharges on these taxes and prepayments.

In terms of whether the information held by banks and other financial institutions apply to the Exchange of information article, it clarifies in the protocol that such information will be exchanged only upon request. If the request does not identify both a specific taxpayer and a specific bank or financial institution, the competent authority of the requested State may decline to obtain any information that it does not already possess.

China and France

On 26 November 2013, the government of China and France signed a new Double Taxation Treaty (“new DTA”), which is due to replace the 1984 DTA and its associated Protocol. The new DTA incorporated new elements of a modern double taxation treaty and has made several important changes to the old DTA. The new DTA could take effect from as early as 1 January 2015.