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Oct 2013, Issue 25

Easier to substantiate Hong Kong tax resident status under the HK-Mainland CDTA

Recently the State Administration of Taxation (SAT) issued the Public Notice [2013] No. 53 (Public Notice 53) addressing the guidelines for recognition of the Hong Kong tax resident status under the comprehensive double tax arrangement (CDTA) entered between Hong Kong and the Mainland (the HK-Mainland CDTA). Effective from 1 November 2013, Hong Kong incorporated companies can substantiate its Hong Kong tax resident status in application for a treaty benefit under the HK-Mainland CDTA without having to obtain a Hong Kong tax resident certificate (HKTRC). For non-Hong Kong incorporated companies, they still have to obtain a HKTRC issued by the Hong Kong Inland Revenue Department (HKIRD). Mainland tax authorities have become more receptive to the HKTRC issued by the HKIRD, but there are specific circumstances whereby the Mainland tax authorities would require further assessment on the tax residency of the applicant.

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