The double taxation agreement between Hong Kong and Austria, which was originally signed in May last year, came into effect from the start of January after the accord was ratified by both jurisdictions, according to Tax News.

The DTA will clarify the taxing rights between the two jurisdictions, eliminate instances of double taxation on the same source of income, and cut withholding tax rates on passive income from dividends, interest and royalties, the publication said.

Dozens of countries have signed DTAs over the past 12 months, as jurisdictions have continued to try and stamp out tax evasion.

Under this agreement, interest income withholding tax is set at zero in the country of the payer, while dividend income is set at a maximum of 10 per cent. Withholding tax on royalty income is similarly limited to a maximum of 3 per cent, it said.

There are also special provisions for shipping and air transport, with profits from the operation of ships or aircraft in international traffic, including lease income and container leases, taxable only in the country of the owner.