Core Viewpoint - The Hong Kong Inland Revenue Department has released updated guidelines regarding the arrangement for avoiding double taxation on income between Mainland China and Hong Kong, providing clearer answers for cross-border employment income tax treatment. Group 1: Tax Exemption Conditions for Hong Kong Residents in Mainland China - To enjoy tax exemption on employment income in Mainland China, Hong Kong residents must meet three core conditions: 1. Time Limit: Stay in Mainland China for no more than 183 days within any 12-month period [3] 2. Employer Identity: The remuneration must be paid by a non-Mainland resident employer [4] 3. Expense Burden: The remuneration should not be borne by a permanent establishment of the employer in Mainland China [4] Group 2: Distinction Between "Stay" and "Residence" Days - The definitions of "stay" days and "residence" days differ in cross-border tax calculations, and taxpayers have the right to choose the more favorable calculation method, providing valuable flexibility for tax planning [4] - "Stay" days are calculated based on the "days present in the location" method, counting each day of entry, exit, and stay as one day [5] - "Residence" days, used for Mainland personal income tax calculations, count only full 24-hour stays since 2019 [6] Group 3: Definition of Hong Kong Tax Residents - Individuals can be recognized as Hong Kong tax residents if they meet any of the following criteria: 1. "Ordinarily reside in Hong Kong" [7] 2. Stay in Hong Kong for more than 180 days in the relevant tax year, or accumulate over 300 days in two consecutive tax years [7] - Holding a Hong Kong permanent resident ID does not automatically confer tax resident status, as the tax authority considers multiple factors [7] Group 4: Resolving Dual Residency with "Tie-Breaker Rules" - For individuals who are tax residents in both regions, the "tie-breaker rules" provide a structured resolution path, considering: 1. The location of the permanent home [8] 2. The center of personal and economic relations [8] 3. Habitual residence [8] Group 5: Advantages of Hong Kong's Tax System - The recent clarification of cross-border tax rules highlights the significant advantages of Hong Kong's tax system, which is characterized by low rates, few types of taxes, and clear, transparent rules [9] - An effective Hong Kong tax resident status is crucial for optimizing cross-border financial structures and achieving stable asset growth [9] - Comprehensive tax planning for individuals and business owners operating across both regions is a wise arrangement for wealth management and future planning [9]
合丰集团｜香港跨境税务新规！符合这些条件，收入可免征税