Effective from 15 April 2016, a Hong Kong tax resident certificate (HKTRC) issued by the Hong Kong Inland Revenue Department (IRD) under the comprehensive double tax arrangement between the Mainland and Hong Kong (Mainland-HK DTA) for a calendar year can serve as a proof of the Hong Kong resident status for that calendar year and the two succeeding calendar years. The issued HKTRC will not serve as a proof of the Hong Kong resident status for the two succeeding calendar years only if there are changes in the circumstances that render the applicant no longer a Hong Kong tax resident and/or eligible to the treaty benefits. Such streamlined administrative arrangement applies to all HKTRCs issued by the IRD to individual and non-individual taxpayers for the purpose of the Mainland-HK DTA, including those issued before 15 April 2016. In connection with the above revised administrative arrangement, the HKTRC application forms for use under the Mainland-HK DTA have also been revised to reflect these changes. The new forms are used from 20 June 2016.
In this issue of China Tax News Flash, we would like to introduce the details on extension of the valid period of a HKTRC, changes to the HKTRC application forms, highlight implications on the eligibility of treaty benefit in China and provide take away points for companies to get better preparation in order to obtain Hong Kong resident status going forward.