What is Tax Residency Certificate?
A Tax Residency Certificate is a document issued by the competent authority in Hong Kong to a Hong Kong resident who requires proof of resident status for the purposes of claiming tax benefits under the Comprehensive Double Taxation Agreements / Arrangement (DTAs).
While the IRD is committed to providing Hong Kong residents with assistance in claiming all the tax benefits they are entitled to under a DTA, the IRD may refuse to issue a Tax Residency Certificate where it is clear that the person would not be entitled to those benefits. As such, there may be cases where a person will not be able to obtain a Tax Residency Certificate because that person does not fulfill the criteria of the particular article under which that person intends to claim benefits.
Persons should also be aware that issuance of a Tax Residency Certificate will not guarantee that they will be successful in their claim to benefits under the relevant DTA. The decision as to whether relief from foreign taxes can be granted is, ultimately, to be made by the treaty partner. It will be up to the treaty partner to determine whether all the relevant conditions are fulfilled and whether benefits can be granted.
Who can apply?
In general, the following persons can apply for a Tax Residency Certificate:
- Individual who ordinarily resides in Hong Kong;
- 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;
- Company / partnership / trust / body of persons incorporated or constituted in Hong Kong; or
- Company / partnership / trust / body of persons incorporated or constituted outside Hong Kong but managed or controlled in Hong Kong.
It normally takes 21 working days to process an application. Where the information available is not sufficient to determine the resident status, further information will be required by the IRD.
For more details on the above, please contact Kenneth Au at firstname.lastname@example.org /+ 852 35529096 or Kevin Lei at email@example.com / + 852 3552 9096 at Zetland Tax Advisors.