Hong Kong and Kazakhstan have begun their first round of negotiations for a Comprehensive Double Taxation Agreement (CDTA), scheduled from 24 to 28 August 2026. The Hong Kong Inland Revenue Department (IRD) listed the maiden Kazakhstan talks on its "Negotiations Commenced / to be Commenced" register, marking a notable expansion of Hong Kong's tax treaty network into Central Asia.

Why This Matters for Hong Kong Companies

Currently, no income tax treaty exists between Hong Kong and Kazakhstan. The double tax agreement between mainland China and Kazakhstan does not extend to Hong Kong, leaving Hong Kong residents exposed to Kazakhstan's full domestic withholding tax on Kazakhstan-source income. Because Kazakhstan classifies Hong Kong as a preferential tax jurisdiction, that withholding rate is 20% on cross-border payments such as dividends, interest and royalties.

A Hong Kong-Kazakhstan CDTA would change the calculus. If concluded, the treaty could cap withholding tax rates, clarify taxing rights on business profits, and provide a mutual agreement procedure for disputes. For Hong Kong holding companies, trading firms and Belt and Road investors looking at Kazakh energy, mining and infrastructure opportunities, the agreement would reduce tax leakage and improve legal certainty.

The Road from Negotiation to Relief

The 24-28 August talks are only the opening round. Any draft text must be finalized, signed and ratified by both jurisdictions before the treaty enters into force. Hong Kong typically gives treaty effect through an order under section 49 of the Inland Revenue Ordinance (Cap. 112), after which the IRD publishes a synthesized text and withholding tax rate table.

Businesses should not assume immediate relief. Based on recent Hong Kong treaty practice, a first-round negotiation concluded in late 2026 could lead to signature in 2027 and entry into force around 2028, with first application to Hong Kong profits tax from the year of assessment 2028/29.

Context: Hong Kong's Widening Treaty Network

The Kazakhstan talks are the latest step in a busy 2026 for Hong Kong treaty diplomacy. The IRD has already completed first rounds with Oman (January), Slovenia (January), Laos (March) and a second round with Morocco (July). As of August 2026, Hong Kong has concluded 59 CDTAs, of which 51 are in force, with another 18 jurisdictions in active negotiations.

Both Hong Kong and Kazakhstan already participate in the automatic exchange of financial account information under OECD standards, so the new treaty would complement existing transparency obligations rather than replace them.

Practical Takeaways

Until a treaty is ratified, Hong Kong companies receiving Kazakhstan-source income should continue to budget for the 20% withholding rate and document any foreign tax credit positions carefully. Once the treaty is published, taxpayers will need to obtain a Hong Kong Certificate of Resident Status and satisfy any beneficial ownership or limitation-on-benefits provisions before claiming reduced rates.

For companies considering Hong Kong company registration as a base for Central Asian investment, the opening of Kazakhstan talks reinforces Hong Kong's role as a treaty-expanding gateway. The negotiation itself is not yet a tax cut, but it is a clear signal that formal relief is on the horizon.