Tax residence in the Mainland and in Hong Kong

If you hold a mainland household registration and work in Hong Kong, if you commute between Shenzhen and Hong Kong for work, or if your Hong Kong employer sends you to the mainland on business, you may have to deal with both Hong Kong salaries tax and mainland individual income tax. The notes below set out how each place decides who is a tax resident, the 183-day rule in Article 14 of the Arrangement between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion (the Arrangement), how the days are counted, and how a mainland resident individual reports foreign-source income and claims a credit. They follow the Inland Revenue Department's frequently asked questions on the Arrangement, Departmental Interpretation and Practice Notes No. 44 (DIPN 44), the Individual Income Tax Law of the People's Republic of China, and Announcement 2019 No. 34 and Announcement 2020 No. 3 of the Ministry of Finance and the State Taxation Administration. Checked 19 October 2026. These notes are not tax advice. If the sum is large, ask a registered tax agent, or the tax authorities of the two places. The Inland Revenue Department hotline is 187 8088.

Each place decides who is a resident

1. Article 1 of the Individual Income Tax Law:
   1. An individual who has a domicile in China, or who has no domicile but has lived in China for an aggregate of 183 days in a tax year (a calendar year), is a resident individual. A resident individual is taxed on income from inside China and on income from outside China.
   2. Anyone else is a non-resident individual, and is taxed only on income from inside China.

The detailed test of "domicile" is in the relevant mainland rules. These notes have not obtained that original text. In a particular case, follow the view of the mainland tax authority.

1. How days of residence are counted for an individual with no domicile (Announcement 2019 No. 34). A day on which you are present in the mainland for a full 24 hours counts as a day of residence. A day of less than 24 hours does not count.
2. The six-year rule for an individual with no domicile is in the same announcement. It applies in a tax year in which that individual has lived in the mainland for an aggregate of 183 days.
   1. If each of the previous 6 years also reached 183 days, and in none of those years was there a single absence of more than 30 days, then in the current year both income from the mainland and income from outside the mainland are taxable.
   2. If any one of the previous 6 years was under 183 days, or if in any one of those years there was a single absence of more than 30 days, then income sourced outside the mainland and paid by an entity or an individual outside the mainland is exempt from individual income tax for the current year.

The previous 6 years are counted from 2019 onwards. 2019 is included.

1. An individual who is a resident of Hong Kong under Article 4 of the Arrangement:
   1. A person who ordinarily resides in Hong Kong.
   2. A person who stays in Hong Kong for more than 180 days in the relevant year of assessment, or for more than 300 days in 2 consecutive years of assessment, one of which is the relevant year. The stay may be continuous. It may also be an aggregate.
2. A Hong Kong permanent identity card does not by itself make you a Hong Kong tax resident. The question is whether you ordinarily reside in Hong Kong. The Inland Revenue Department looks at whether you keep a permanent home in Hong Kong for yourself or your family, how many days you stay in Hong Kong, whether you have a fixed place to live in Hong Kong, whether you have a self-occupied property outside Hong Kong, and where you mainly live.

If you are a resident of both places

The Arrangement uses the model of the Organisation for Economic Co-operation and Development. The tests are applied in this order:

1. On which side you have a permanent home.
2. If you have a permanent home on both sides, the side with which your personal and economic relations are closer.
3. The side in which you habitually live.
4. A settlement by agreement between the competent authorities of the two sides.

Examples from the Department's frequently asked questions:

1. You hold a mainland household registration. You came to Hong Kong under a talent admission scheme. You have a home in Hong Kong. Your spouse and children live with you in Hong Kong. You return to the mainland only now and then. If the Hong Kong home is permanent in nature, and you have no permanent home on the mainland, you are generally treated as a Hong Kong resident.
2. The facts are the same, except that you have to work on the mainland often. It is then more likely that you keep a permanent home on the mainland, and that your relations with the mainland are closer.
3. You work in Hong Kong on weekdays and return to the mainland at the weekend. Your spouse and children remain on the mainland. There should be a permanent home on the mainland. Whether the Hong Kong home is permanent in nature has to be judged on the facts. If it is not permanent in nature, you are treated as a mainland resident.

Employment income: the 183-day rule in Article 14

1. Remuneration that a resident of one side derives from employment exercised in the other side is exempt from tax in the place of work if all 3 of the following are met:
   1. In any 12-month period that begins or ends in the tax year in question, the person is present in the place of work for not more than 183 days in total. The presence may be continuous, or it may be an aggregate of separate days.
   2. The remuneration is paid by, or on behalf of, an employer who is not a resident of the place of work.
   3. The remuneration is not borne by a permanent establishment which the employer has in the place of work.
2. If any one of the 3 is not met, the place of work may tax the remuneration. If the place of residence taxes it as well, a credit is available under the Arrangement.
3. "Any 12 months" can cross a year end. The 12-month window moves. The Department's example: to test the Hong Kong year of assessment 2021/22, look at any 12 months between 2 April 2020 and 30 March 2023. To test the mainland tax year 2021, look at any 12 months between 2 January 2020 and 30 December 2022.

How the days are counted

1. To decide whether a stay exceeds 183 days, use days of presence under the Arrangement. Count days of physical presence. The day you arrive, the day you leave, and every day in between each count as 1 day. The length of the stay on that day does not matter. The reason for the stay does not matter.
2. That count is different from the mainland "days of residence" used from 2019, which counts a day only if you are present for a full 24 hours. The 24-hour count is used only for the mainland individual income tax rules themselves. If the two counts give different results, a Hong Kong resident may claim the Arrangement or may choose not to claim it, and may work out the mainland tax by the method that is more favourable.
3. When the amount of tax is worked out, each stay is taken as the days of physical presence minus 1. If you arrive on 2 January and leave on 5 January, the stay counts as 3 days. The tax authorities of the two sides have agreed on one further point. If you travel between the two places on the same day, and you provide services in both places, count half a day.
4. In practice:
   1. Check the arrival and departure records of the two places, day by day.
   2. Keep your own record of where you worked each day, and of whether you made a same-day return trip.
   3. Keep the travel approval and the meeting record, as evidence of where you provided the services.

Rules that apply on the Hong Kong side

1. A mainland resident employed in Hong Kong may fail the Article 14 exemption, for example because a Hong Kong employer pays the remuneration. If that person visits Hong Kong for not more than 60 days in the relevant year of assessment, Hong Kong applies the treatment that is more favourable to the taxpayer. Salaries tax may be exempted under the Inland Revenue Ordinance.
2. A Hong Kong resident who has paid tax of a similar nature on the mainland, on remuneration for services provided on the mainland, may apply under section 8(1A)(c) of the Inland Revenue Ordinance for that part to be exempted, or may apply for a credit under the Arrangement. Which of the two applies is set out in DIPN 44.
3. A Hong Kong resident who claims the Arrangement on the mainland applies to the Inland Revenue Department for a certificate of resident status, and applies on the mainland directly. From 1 November 2015, that application does not need to be accompanied by a letter from the mainland tax authority.

A director's fee is outside the 183-day rule

Article 15 of the Arrangement: a director's fee derived by a resident of one side, as a member of the board of a company that is a resident of the other side, may be taxed in the side of which the company is a resident. Days of presence do not matter. The place where the duties are performed does not matter. A director's fee paid to a Hong Kong resident who is a director of a mainland company is charged in full to individual income tax on the mainland, and is not taxed in Hong Kong. A director's fee paid to a mainland resident who is a director of a Hong Kong company is charged in full to salaries tax in Hong Kong.

Reporting foreign income and claiming a credit on the mainland

This section is for a person who is a resident individual on the mainland and who also receives wages in Hong Kong.

1. When to file. From 1 March to 30 June of the year after the year in which the foreign-source income arose (Article 13 of the Individual Income Tax Law, and Article 7 of Announcement 2020 No. 3).
2. Where to file:
   1. If you have an employer in the mainland, file with the competent tax authority at the place of that employer.
   2. If you do not, file at the place of your household registration, or at your habitual residence in the mainland.
   3. If those two places differ, you may choose either.
   4. If you have no household registration, file at your habitual residence.
3. The credit limit. Foreign tax you have paid may be credited up to the credit limit. For comprehensive income, the credit limit equals the tax payable on comprehensive income from inside and outside China, multiplied by the amount of comprehensive income from the place in question, divided by the total amount of comprehensive income from inside and outside China.
4. The amount of the credit. If the tax actually paid is below the limit, credit the amount actually paid. The part above the limit may be carried forward and credited within the next 5 tax years.
5. Amounts that cannot be credited include:
   1. Tax paid in error, or tax collected in error.
   2. Tax that should not have been charged under a tax agreement, including the Arrangement between the mainland and Hong Kong.
   3. Interest, a late-payment charge, or a fine.
   4. Tax that has been refunded or compensated.
   5. Tax borne by foreign-source income that was exempt.

So if Article 14 meant the income was exempt in Hong Kong, and tax was nevertheless paid in Hong Kong, that part cannot be credited on the mainland. Apply for a correction in Hong Kong first.

1. Proof of payment. You must produce a certificate of tax paid, a tax payment document, or a tax record issued by the foreign taxing body. Without that, no credit is given. On the Hong Kong side, keep the notice of assessment and the payment record. If you truly cannot produce those, you may use the foreign tax return (or the notice demanding payment) together with the bank payment voucher.
2. A later claim. If you have already reported the foreign-source income, and you did not claim the credit at the time, you may claim it after you obtain the proof. The claim can go back at most 5 years.
3. Matching the year. If the foreign tax year is not the calendar year (a Hong Kong year of assessment runs from 1 April to 31 March of the following year), the matching mainland tax year is the calendar year in which the last day of the foreign tax year falls. The Hong Kong year of assessment 2025/26 matches the mainland tax year 2026.

A checklist

1. Are you a resident individual on the mainland? Do you have a domicile? If you have no domicile, how many days in the year were you in the mainland for a full 24 hours?
2. Are you a Hong Kong tax resident? Do you ordinarily reside in Hong Kong, or did you stay in Hong Kong for more than 180 days in the year?
3. If you are a resident of both, which side do you more likely belong to under the tie-breaker?
4. If you work across the boundary, do your days of presence in the other side exceed 183 days in any 12-month period? Who pays the remuneration, and who bears it?
5. Is there a director's fee?
6. Have you kept the Hong Kong notice of assessment and the payment record?

Sources

• Inland Revenue Department, frequently asked questions on the Arrangement between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion (checked 19 October 2026)
• Inland Revenue Department, Departmental Interpretation and Practice Notes No. 44 (DIPN 44) (Simplified Chinese version, checked 19 October 2026)
• Text of the Arrangement between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion (checked 19 October 2026)
• Individual Income Tax Law of the People's Republic of China, Articles 1, 7, 10, and 13 (website of the National People's Congress, checked 19 October 2026)
• Ministry of Finance and State Taxation Administration, Announcement 2019 No. 34, on the standards for determining the period of residence of an individual who has no domicile in China (Chinese Government website, checked 19 October 2026)
• Ministry of Finance and State Taxation Administration, Announcement 2020 No. 3, on individual income tax policy relating to foreign-source income (Chinese Government website, checked 19 October 2026)