- 1
- A person shall be considered a headquarters company for the purposes of paragraph 3, subparagraph (a) (iv) of Article 10 only if:
-
- a)the corporate group consists of corporations resident in, and engaged in an active business in, at least five countries and the business activities carried on in each of the five countries generate at least 10 per cent of the gross income of the group; and
- b)no more than 50 per cent of its gross income is derived from the Contracting Party of which the company paying the dividend is a resident.
- 2
- The determination for the purposes of paragraph 3, subparagraph (e) of Article 10 shall be based on all facts and circumstances including:
-
- a)the nature and volume of the activities of the company in its country of residence in relation to the nature and volume of the dividends;
- b)both the historical and the current ownership of the company; and
- c)the business reasons for the company residing in its country of residence.
- The competent authority which has to grant the benefit will consult with the competent authority of the other Contracting Party before denying the benefit.
- 3
- For the purposes of paragraph 3 of Article 10 and paragraph 4 of Article 13 the term “recognised stock exchange” means:
-
- a)any of the stock exchanges in the member states of the European Union (EU);
- b)The Stock Exchange of Hong Kong Limited;
- c)any other stock exchange agreed upon by the competent authorities of the Contracting Parties,
- provided that the purchase or sale of shares on the stock exchange is not implicitly or explicitly restricted to a limited group of investors.
- 4
- For the purposes of Article 10, paragraph 3, subparagraph (c), in the case of the Hong Kong Special Administrative Region, institution means in any case:
-
- a)the Hong Kong Monetary Authority;
- b)a financial establishment appointed by the Government of the Hong Kong Special Administrative Region and mutually agreed upon by the competent authorities of the two Contracting Parties.
