Hong Kong has already entered into Comprehensive Double Taxation Agreement (“CDTA”) with more than 40 tax jurisdictions. The most commonly used one would definitely be the CDTA with the PRC.
The definition of tax resident in Hong Kong is as follows:-
Individual
· an individual who ordinarily resides in Hong Kong; or
· an individual who stays in Hong Kong for more than 180 days during a year of assessment or for more than 300 days in two consecutive years of assessment (one of which is the relevant year of assessment)
Under the CDTA between Hong Kong and the PRC:
Withholding tax | Without DTA | With DTA |
Dividends | 10% | 5% |
Interest | 10% | 7% |
Royalties | 10% | 5% / 7% |
To mitigate potential cross-border tax risks and enjoy treaty benefits with other tax jurisdictions, demand for application of Hong Kong tax resident certificate has gradually been increasing. We believe alignment of commercial substance and planning enable taxpayers to apply the certificate successfully.
We can assist you on the following services:
· Advisory on conditions for obtaining Hong Kong tax resident certificate with practical implementation plan
· Application of Hong Kong Tax Residency Certificate
