In the 2016 annual meeting between the Inland Revenue Department (IRD) and the Hong Kong Institute of Certified Public Accountants (HKICPA) (the 2016 meeting), the IRD commented on the conditions specified in the Fourth Protocol to the comprehensive double tax arrangement between Hong Kong and the Mainland (HK/Mainland CDTA) for claiming a tax exemption on gains derived from disposal of shares listed in China or Hong Kong. In addition, the IRD revealed certain statistics on issuing of Hong Kong certificate of residence status (HK CoR) and the progress of the advance pricing arrangement (APA) program since its launch in April 2012.
While the meeting minutes are not legally binding, they serve as a good reference of the IRD's stance on various tax issues. Taxpayers that may be affected by the IRD's comments on the application of tax treaties as indicated in the 2016 meeting minutes should revisit their current situations and consider any necessary actions to support/strengthen their HK CoR applications or treaty benefit claims.
Tel: + 2289 5802
China & Hong Kong M&A Tax Leader
Tel: + 2289 5616
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Tel: + 2289 3122