The Certificate of Hong Kong Tax Resident Status (CoR) is issued by the Inland Revenue Department of Hong Kong (IRD) to recognize the status of Hong Kong tax residents and provide them with the convenience of enjoying the benefits brought about by the tax treaties. Whether you are a business or an individual, an understanding of CoR is essential. As the Inland Revenue Department (IRD) is of the view that the applicant may not have met the conditions of the CoR, it will request the applicant to provide more information for scrutiny. Therefore, in this article, we will discuss what is Certificate of Hong Kong Tax Resident Status (CoR) and how to apply for CoR so that you can have a more comprehensive understanding of Hong Kong tax.
What is Certificate of Hong Kong Tax Resident Status (CoR)?
According to the Hong Kong Inland Revenue Ordinance, the Certificate of Resident (CoR) is a document issued by the Inland Revenue Department (IRD) of Hong Kong.
The document certifies that the holder is a tax resident of Hong Kong for a particular tax year, confirming that the individual or company is a valid tax resident of Hong Kong under a Double Taxation Agreement (DTA) with a particular foreign tax jurisdiction for a particular tax year in Hong Kong.
Why do I need to apply for a Certificate of Hong Kong Tax Resident Status (CoR)?
The CoR is an important document for business stakeholders. If your company has business in Hong Kong or you have income in Hong Kong, then you may need a CoR to prove your tax residency status. This is because many countries and territories have double tax treaties with Hong Kong, which prevents you from having to pay tax in both places. Only Hong Kong tax residents with a CoR can enjoy the tax benefits of these agreements.
So far, Hong Kong has signed Double Taxation Agreements (DTAs) with 28 jurisdictions. Under these agreements, individuals or entities that are Hong Kong tax residents may be eligible to enjoy the tax benefits granted by the DTAs. For example, DTA partners may offer reduced withholding tax rates, which apply to passive income such as dividends, interest and royalties.
For applications for Certificates of Hong Kong Tax Resident Status, the Inland Revenue Department of Hong Kong (IRD) usually accepts applications from the following groups:
Individuals who are ordinarily resident in Hong Kong;
Individuals who are present in Hong Kong for more than 180 days in a particular tax year, or for more than 300 days in two consecutive tax years, one of which is a relevant tax year;
Companies, partnerships, trusts or organizations incorporated or established in Hong Kong;
Companies, partnerships, trusts or organizations incorporated or established outside Hong Kong but managed or controlled from Hong Kong.
How to apply for CoR?
To obtain a Certificate of Hong Kong Tax Resident status, you need to submit a completed application form together with the necessary documents to the Inland Revenue Department of Hong Kong (IRD). Normally, it takes about 21 working days for the Inland Revenue Department of Hong Kong to process and assess your application.
The process of applying for CoR is relatively simple. You need to fill in the CoR application form provided by the IRD. In the form, you need to provide
Some details of the physical facilities, such as location, size, layout, use, function, and relevant supporting documents such as lease agreement are to be submitted. More likely, it will include details of the directors and management staff, including their personal background, their respective roles/duties/responsibilities, place of work, salary and other benefits, and relevant supporting documents such as employment contract, director’s appointment contract, service contract, travel itinerary, Travel Record Statement issued by the Hong Kong Immigration Department.
After completing the application form, you need to send it to the Inland Revenue Department (IRD), which will use it for vetting purposes. It is important to note that the Certificate of Resident Status is only valid for one calendar year and you will need to reapply after the expiry date. The above information is for reference only. If you have any enquiries about tax filing (individual, corporate, accountant), we welcome you to contact our professional consultants and will provide you with a free quote and consultation service later.