For companies operating across borders, one of the tax risks is double taxation. A common example is the need for Hong Kong companies to pay both Hong Kong and mainland taxes when doing business in the mainland. To avoid companies paying taxes on the same income, tax residents who apply to become one of them can avoid the risk of double taxation.

 

 

Certificate of Resident / Tax Resident Certificate are issued by the Hong Kong Inland Revenue Department for proofing the enterprises or individuals are Hong Kong tax residents and eligible to enjoy preferital tax treatments under Double Taxation Arrangement / Agreements.  Applications (mainland or overseas enterprises) can enjoy tax benefits after obtaining the Certificate of Tax Resident.

 

Here's an overview of the Tax Resident Certificate in Hong Kong:

1. Eligibility for TRC: To be eligible for a TRC in Hong Kong, an individual or a company must be a Hong Kong tax resident. For individuals, this means being physically present in Hong Kong for some days during the tax year. For companies, it means having the central management and control located within the territory.

2. Application Process: To apply for a TRC in Hong Kong, applicants must complete the relevant application form provided by the Inland Revenue Department (IRD). The form requires applicants to provide necessary details, such as the tax year for which the certificate is required, and the relevant tax treaty provisions. Supporting documents, such as tax returns, financial statements, and proof of residency, may also be required.

3. Utilizing TRC for Double Taxation Relief: With a valid TRC, Hong Kong tax residents can claim tax treaty benefits and avoid double taxation on income derived from foreign sources. This involves presenting the TRC to the foreign tax authorities and fulfilling any additional requirements specified under the applicable tax treaty.

 

Our team can assist you in determining your eligibility for a Tax Resident Certificate, guide you through the application process, and help you utilize the TRC to claim tax treaty benefits. Our goal is to ensure your tax affairs are managed efficiently, allowing you to focus on your business and personal endeavors with peace of mind.

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展群CK ® has assisted many overseas enterprises to become Hong Kong tax residents and greatly reduce Group's tax burden

 

https://www.ird.gov.hk/chi/tax/dta_inc.htm

 

 

After becoming Hong Kong tax residents, tax benefits include:

• Overseas companies are entitled to a lower withholding tax on tax residents paid to Hong Kong (withholding tax)

  • Dividend - withholding tax can be reduced from 10% to 5% for PRC entities

  • Interest - withholding tax (withholding tax) can be reduced to 7% for PRC entities

  • Royalty fee - withholding tax (withholding tax) can be reduced to 7% for PRC entities

• Hong Kong is known for its low tax rates and less tax types, and does not levy the following taxes:

  • Dividend tax

  • Interest tax

  • Royalty tax

  • Capital gain tax

  • Estate duty

 

• Pay low Hong Kong's profits tax or salaries tax (tax rates are lowered than other Asian region, since 2018/19, the profits tax rate is as low as 8.25%

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Before issuing Certificate of Resident / Tax Resident Certificate by the Inland Revenue Department, the IRD will identify whether the applicants (enterprises or individuals) are eligible and fulfill the conditions, such as place of incorporation, where the management or control taken place and other important tax information

 

 

展群CK ® clients are usually PRC entities and distribute dividend, interest or royalty fee to Hong Kong investment holding company.  We assist the Hong Kong entity to apply for Certificate of Resident / Tax Resident Certificate and reply the enquries letters that raised by the Inland Revenue Department .

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​​​Please note that under the international pressure, the Inland Revenue Department is now approaching a stringent approach towards the issuance of Certificate of Resident / Tax Resident Certificate.  Applicants need to present and show that their Companies have real business substance in order to convince the Inland Revenue Department.  Experienced tax representative (展群CK ®) can greatly reduce the chance of being rejected by the Inland Revenue Department.

 

As a professional tax firm, 展群CK ® can provide the following services :

• 展群CK ® become tax representative and becomes the communcation bridge between our clients and the Inland Revenue Department

• Provide tax advice on tax restructuring

• Implementation of tax restructuring

• Application of Certificate of Resident / Tax Resident Certificate

 

For further information, please contact 展群CK ®:
a. Phone at (852) 3502 7392
b. Whatsapp at (852) 5227 9242
c. Email at info@ck-tax.com