Generally, Hong Kong tax resident can enjoy preferential tax treatment for income earned from countries / jurisdictions which signed tax treaties with Hong Kong. On the other hand, in many countries / jurisdictions, tax requirements for non-residents are generally more relaxed, comparing to resident taxpayers.
What is Certificate of Resident Status
The Certificate of Resident Status is issued by the relevant authority in Hong Kong to residents who need documentation of their resident status. This is required to claim tax benefits under the Comprehensive Double Taxation Agreements and Arrangements (DTAs) that Hong Kong has with other jurisdictions.
Obtaining Hong Kong Certificate of Resident Status
In order to prove its / his / her Hong Kong tax residency status, a Hong Kong corporate / individual tax resident can request the Hong Kong Inland Revenue Department to issue a Certificate of Resident Status to officially certify the status. In practice, the Hong Kong Inland Revenue Department would examine each application closely, and only issue the Certificate of Resident Status if the tax resident can satisfy certain conditions. CityLinkers has a lot of successful cases in helping our client to obtain the certificate. In addition to the support in preparing and filing the application, we can also provide advice to our client to increase the chance of success in obtaining the certificate.
Benefits of having Certificate of Resident Status
Tax treaties generally provide preferential treatment to non-residents, for example:
- Income of Hong Kong resident enterprises in Mainland China, such as royalties, service fees, dividends, capital gains from equity transfer, etc. can enjoy lower corporate income tax rates or even tax exemption if meeting the conditions.
- Salary income of Hong Kong resident individuals in Mainland China can be exempt from Mainland individual income tax if meeting the conditions.
- Director's fee income received by Hong Kong resident individuals in Hong Kong can be exempt from Mainland individual income tax if meeting the conditions.
Eligibility for applying Certificate of Resident Status
In general, the following individuals/entities can apply for Certificate of Resident Status from the Hong Kong Inland Revenue Department
- Individuals ordinarily residing in Hong Kong
- Individuals staying in Hong Kong for more than 180 days during a tax year or for more than 300 days over two consecutive tax years (one of which is the relevant tax year)
- Companies, partnerships, trusts or other bodies incorporated or constituted in Hong Kong
- Companies, partnerships, trusts or other bodies incorporated or constituted outside Hong Kong but centrally managed or controlled in Hong Kong
Documents required for applying Certificate of Resident Status
In addition to the information required in the application form, applicants need to provide the following documents when submitting the application:
- For company applicants: Copy of Certificate of Incorporation, Copy of Certificate of Change of Name (if applicable)
- For partnership enterprises (excluding limited partnership funds): Certified copy of Partnership Agreement, Information of each partner during the relevant year, including name, HKID number, BR number and address
- For limited partnership funds: Copy of Certificate of Registration, Copy of Certificate of Change of Name (if applicable)
- For trusts: Certified copy of Trust Deed
- For organisations: Certified copy of Constitutional Document
The application form of Certificate of Resident Status must be signed by the following
- For individual applicants: the individual
- For company applicants: a director, company secretary or manager of the company
- For partnership enterprises (excluding limited partnership funds): The managing partner
- For limited partnership funds: The general partner or authorized representative
- For trusts: The trustee
- For organisations: The principal officer of the organisation
Procedures and time required for applying Certificate of Resident Status
Applicants can submit the completed paper application form to the Assessor (Tax Treaty), Tax Treaty Section of the Hong Kong Inland Revenue Department. Under normal circumstances, the IRD will process the application within 21 working days. If further information is required by the IRD to ascertain the applicant's Hong Kong tax resident status, individual contacts will be made to request the applicant to provide relevant information or documents.
How can CityLinkers assist you in successfully applying Certificate of Resident Status
CityLinkers assist clients to obtain the certificate successfully . Apart from preparing and submitting the application, we can also provide advice to increase the chance of success for the application. Please contact us for more details,