New application format for tax residency in Hong Kong

30th of October, 2023

The Hong Kong IRD (Inland Revenue Department) is conservative in its approach. Significant and systemically important changes are made infrequently, and their discussion with the public usually precedes their implementation for a long time. This significantly reduces the risks associated with possible hidden errors and aspects that could affect the financial and tax stability in Hong Kong.

The importance of the changes effective June 12, 2023 can be described as somewhat different. The innovations formally related to the renewal of the application for tax residency status seem insignificant. However, in practice, the Hong Kong Revenue Authority is gradually revising the procedure for issuing this document in order to strengthen the country's place in international tax cooperation. Therefore, assessing the importance of these changes when considering them today should be done with caution.

Our popular multi-jurisdictional services include company registration in Hong Kong + Chinese bank account.

The essence of the changes is related to the fact that IRD (Inland Revenue Department) will make decisions on issuance of tax residency certificate based on a new interpretation of the concept of tax residency. This interpretation takes into account bilateral double taxation treaties (DTAs) between Hong Kong and other countries. There are currently 45 DTAs and 7 TIEAs (Tax Information Exchange Agreements) in force in Hong Kong. For further clarity, the official IRD circular that defines the status of beneficial owners is also used (STA Circular 2018 No. 9).

To obtain Hong Kong tax resident status, Mainland Chinese applicants must complete the following forms:

  • IR1313A (06/2023) – for any business;
  • IR1314A (06/2023) – for individuals.

For non-Mainland China applicants, the following forms should be completed:

  • IR1313B (06/2023) – for any business;
  • IR1314B (06/2023) – for individuals.

Note that these forms are for companies, partnerships, trusts, and groups of individuals doing business together.

Individuals eligible to apply for a Hong Kong Tax Resident Certificate include the following categories:

Persons who are permanent or long-term residents of Hong Kong;

  • persons staying in Hong Kong for more than 180 days in one year, or more than 300 days in two years (depending on the period selected);
  • a business registered in Hong Kong;
  • a business incorporated outside Hong Kong but managed or controlled from Hong Kong.

For applicants from Mainland China, the features are as follows:

  • no special referral from the China Revenue Authority is required;
  • Hong Kong tax resident certificate is a legal proof of Hong Kong resident status. It is based on the agreements between Hong Kong and the PRC dated 16.03.2016 and 15.04.2016. The validity period of the certificate is the current year plus the next two years.

These rules and categories determine who is eligible for the Hong Kong Tax Resident Certificate in various situations.

In addition to the service "Company registration in Hong Kong + account in a Chinese bank" we offer:

  • audit. An audit of your company's accounting records and financial statements to ensure compliance with standards and legislation;
  • accounting services. Providing professional bookkeeping services, including accounting for financial transactions, tax reporting and financial compliance;
  • annual company renewals;
  • resolving emerging banking issues that arise when dealing with banks. 

These services help businesses in Hong Kong and other jurisdictions maintain clear financial discipline and comply with laws and regulations.