{"id":24996,"date":"2025-12-03T05:37:57","date_gmt":"2025-12-03T05:37:57","guid":{"rendered":"https:\/\/www.genacct.com\/hk-double-taxation-relief-guide\/"},"modified":"2026-06-24T10:10:32","modified_gmt":"2026-06-24T10:10:32","slug":"hk-double-taxation-relief-guide","status":"publish","type":"post","link":"https:\/\/www.genacct.com\/en\/hk-double-taxation-relief-guide\/","title":{"rendered":"2026 Guide to Hong Kong Double Taxation Relief: Case Study on HK$1M Annual Salary and BIR60 Application Tutorial"},"content":{"rendered":"\t\t
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With the development of the Greater Bay Area, many Hong Kong tax residents face confusion regarding tax filing in both Mainland China and Hong Kong. If you frequently travel across the border for work, are you worried about being double-taxed? This article will teach you how to use the CDTA (Comprehensive Double Taxation Agreement) to apply for tax relief.<\/p>

Based on the Arrangement between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation<\/strong><\/span><\/a> (CDTA) and Inland Revenue Department guidelines, this article uses a case study of an annual salary of HK$1,000,000 to explain tax filing principles, credit methods, and tax differences under cross-border work and dual status.<\/p>

Further Reading: Latest Guide to the eTAX Individual Tax Portal (ITP): One-Stop Tax Filing and Management<\/a><\/span><\/strong><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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    \r\n\t\t\t\t\tAdd a header to begin generating the table of contents<\/span>\r\n\t\t\t\t<\/div>\r\n\t\t\t<\/div>\r\n\t\t\t\t\t<\/div>\r\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    Differences Between Hong Kong and Mainland China Tax Systems<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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    \n\t\t\t\t\t\t\t\t\tBefore diving into residency determination and tax calculations, it is essential to understand the core differences between the tax systems of Mainland China and Hong Kong.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t
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    Hong Kong: Territorial Basis of Taxation<\/h3><\/div>\t\t\t\t\t\t\t\t\t
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    \r\n\t\t\t\t\tHong Kong adopts a \"Territorial Basis\" of taxation, only taxing income derived from Hong Kong. If income does not originate from Hong Kong (such as from cross-border work or services provided overseas), it is generally not taxable in Hong Kong.\nThe tax year runs from April 1 to March 31 of the following year. The main direct taxes include Salaries Tax, Profits Tax, and Property Tax. View the latest Hong Kong Salaries Tax calculations and deductions<\/a><\/span><\/strong>.\t\t\t\t<\/div>\r\n\t\t\t\t\t\r\n\t\t\t\t\t\t\t<\/div>\r\n\t\t<\/div>\r\n\t\t\t<\/div>\r\n<\/div>\r\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    Mainland China: Resident Tax System and Global Taxation<\/h3><\/div>\t\t\t\t\t\t\t\t\t
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    \r\n\t\t\t\t\tMainland China adopts a \"Resident Tax System.\" The definitions of resident and non-resident are established under Article 2 of the \"Regulations for the Implementation of the Individual Income Tax Law.\"\t\t\t\t<\/div>\r\n\t\t\t\t\t\r\n\t\t\t\t\t\t\t<\/div>\r\n\t\t<\/div>\r\n\t\t\t<\/div>\r\n<\/div>\r\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    \n\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/path><\/svg><\/span>\n\t\t\t\t\t\t\t\t<\/path><\/svg><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\t\t\tIndividuals with a Domicile (Not subject to the 183-day rule)<\/a>\n\t\t\t\t\t<\/h4>\n\n\t\t\t\t\t

    If an individual habitually resides in Mainland China due to family, economic interests, or living arrangements, they are considered to have a “domicile.” Such individuals are regarded as resident individuals regardless of their actual number of days stayed and are liable for Individual Income Tax on their global income.<\/p>

    In practice, individuals holding Chinese nationality are usually deemed to have a “domicile” in China. Even if their primary long-term residence is abroad, they may still be defined as Chinese tax residents due to family or economic ties; this does not change regardless of whether they also apply for Hong Kong tax resident status. It must be emphasized: as long as an individual has a “domicile” in Mainland China\u2014including family, economic interest centers, or a habitual residence\u2014they are automatically regarded as a Chinese tax resident, whether or not they hold Hong Kong tax resident status.<\/p>

    In other words, as long as one is a “domiciled individual,” their global income must be declared in China.<\/p>

    Further Reading: [Company Formation Requirements] Can non-Hong Kong residents start a company?<\/strong><\/a><\/span><\/p><\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t

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    \n\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/path><\/svg><\/span>\n\t\t\t\t\t\t\t\t<\/path><\/svg><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\t\t\tIndividuals without a Domicile (Determined by days of stay)<\/a>\n\t\t\t\t\t<\/h4>\n\n\t\t\t\t\t

    If an individual does not have a domicile in the Mainland, their tax status is determined by the number of days stayed. Cross-border workers staying for 183 days or more in a tax year are considered Chinese resident individuals and are taxed on global income; if they stay for less than 183 days, they are non-resident individuals and only need to pay Individual Income Tax on income sourced within Mainland China.<\/p><\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t

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    \n\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/path><\/svg><\/span>\n\t\t\t\t\t\t\t\t<\/path><\/svg><\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t<\/span>\n\t\t\t\t\t\t\t\t\t\t\t\tScope of Taxation for Residents and Non-Residents<\/a>\n\t\t\t\t\t<\/h4>\n\n\t\t\t\t\t

    Resident individuals are taxed on their global income; non-resident individuals only need to declare and pay tax on income sourced within Mainland China.<\/p><\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t

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    Special Exemptions for Non-Resident Individuals<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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    According to the Chinese Individual Income Tax system, if an individual has no domicile in China and stays for less than 90 days in a tax year, their China-sourced income is exempt from Chinese Individual Income Tax, provided it is paid by an overseas employer and that employer has no establishment or venue in China, and the salary is not borne by a Chinese establishment. This rule is particularly important for Hong Kong employees on short-term business trips to the Mainland, as they are generally exempt if their salary is paid by a Hong Kong company and no Mainland tax is withheld.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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    Cross-Border Work: How to Determine if You Need to File Taxes in Both Jurisdictions?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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    Under cross-border work arrangements, whether income must be declared in both Hong Kong and the Mainland depends primarily on the place of work, the number of days stayed, and the employer’s business arrangements.<\/p>

    Further Reading: When will I receive my tax bill? How to check assessment notices on the eTAX Individual Tax Portal (ITP)?<\/a><\/strong><\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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    Place of Employment Principle<\/h3><\/div>\t\t\t\t\t\t\t\t\t
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    \r\n\t\t\t\t\tIf an employer has a permanent establishment in the other region, such as a representative office or branch, that region may have taxing rights even if the employee only performs work there for a short period.\t\t\t\t<\/div>\r\n\t\t\t\t\t\r\n\t\t\t\t\t\t\t<\/div>\r\n\t\t<\/div>\r\n\t\t\t<\/div>\r\n<\/div>\r\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    Tax Case Study: Dual Status with HK$1 Million Annual Salary<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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    Taking a Hong Kong tax resident as an example, receiving a salary in Hong Kong but working in the Mainland.<\/p>

    Assuming an annual salary of HK$1,000,000 for the 2025\/26 tax year with no other deductions or allowances, let’s compare the tax rates of both regions.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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    Hong Kong Salaries Tax Calculation<\/h3><\/div>\t\t\t\t\t\t\t\t\t
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    \r\n\t\t\t\t\tIf the annual salary is HK$1,000,000, after deducting the basic allowance of HK$132,000, the net chargeable income is HK$868,000. Calculated at progressive rates from 2% to 17%, the tax payable is approximately HK$129,560.

    The tax amount calculated at the standard rate of 15% would be higher and therefore does not apply. The final tax is approximately HK$129,560, with an effective tax rate of about 12.9%.\n\t\t\t\t<\/div>\r\n\t\t\t\t\t\r\n\t\t\t\t\t\t\t<\/div>\r\n\t\t<\/div>\r\n\t\t\t<\/div>\r\n<\/div>\r\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    Comparison of Individual Income Tax in Mainland China<\/h3><\/div>\t\t\t\t\t\t\t\t\t
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    \r\n\t\t\t\t\tIf the same income is calculated in the Mainland, using the seven-level progressive rates from 3% to 45% and deducting the basic expense deduction of RMB 60,000, the actual tax is approximately RMB 243,000 (equivalent to about HK$260,000), with an effective tax rate of about 24.3%.\t\t\t\t<\/div>\r\n\t\t\t\t\t\r\n\t\t\t\t\t\t\t<\/div>\r\n\t\t<\/div>\r\n\t\t\t<\/div>\r\n<\/div>\r\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    Dual Status Tax Simulation: Tax Burden Comparison for HK$1,000,000 Annual Salary<\/h3><\/div>\t\t\t\t\t\t\t\t\t
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    Item<\/th>\r\n Hong Kong Salaries Tax(Hong Kong Salaries Tax)<\/small><\/th>\r\n Mainland Individual Income Tax(China IIT)<\/small><\/th>\r\n <\/tr>\r\n <\/thead>\r\n
    Annual Salary Income<\/strong><\/td>\r\n HK$ 1,000,000<\/td>\r\n HK$ 1,000,000<\/td>\r\n <\/tr>\r\n
    Deductions\/Allowances<\/strong><\/td>\r\n Basic Allowance HK$ 132,000<\/td>\r\n Basic Expense Deduction RMB 60,000<\/td>\r\n <\/tr>\r\n
    Tax Base<\/strong><\/td>\r\n Net Chargeable Income HK$ 868,000<\/td>\r\n Taxable Income (Calculated after exchange rate conversion)<\/td>\r\n <\/tr>\r\n
    Applicable Tax Rate<\/strong><\/td>\r\n Progressive rates 2% to 17%<\/td>\r\n 7-level progressive rates 3% to 45%<\/td>\r\n <\/tr>\r\n
    Estimated Tax Payable<\/strong><\/td>\r\n Approx. HK$ 129,560<\/td>\r\n Approx. RMB 243,000 (Approx. HK$ 260,000)<\/td>\r\n <\/tr>\r\n
    Effective Tax Rate<\/strong><\/td>\r\n Approx. 12.9%<\/td>\r\n Approx. 24.3%<\/td>\r\n <\/tr>\r\n <\/tbody>\r\n<\/table>\r\n\r\n