Since its inception in 1992, Dezan Shira Associates has led U.S. investors through Asia`s complex regulatory environment and supported them in all aspects of law, accounting, tax, internal, personnel, compensation and audit issues. As a full-service consulting firm with operating subsidiaries in China, Hong Kong, India and emerging ASEAN, including liaison offices in Boston and Waltham, specifically created to help our U.S. customers, we are your reliable partner for business expansion in Asia and beyond. For any request, please email us to [email protected]. For more information about our company and how to help U.S. investors in Asia, please visit our North American Desk. Certifications and licenses are more important than one might imagine in the Chinese corporate market and tax system. For example, a tax residence certificate is essential for multinationals when they seek tax benefits under international tax agreements or when a foreign company intends to prove that its subsidiary complies with Chinese tax law. In this article, we present the so-called Certificate of Tax Residency (税收居身份证) and give detailed instructions on how expatriates and foreign companies can obtain the certificate. Although the process of obtaining an TC is relatively simple, delays and setbacks are not uncommon.
The application process is localized, but it has cross-border effects that foreign investors should take into account. Warning: Articles by students/apprentices and teachers/researchers of tax treaties generally contain deadlines from which a contract exemption cannot be used. A foreign-born U.S. resident student/trainee or teacher/researcher should consult the current section of the tax treaty to ensure that the contract delivery period has not expired. Once the contractual period has expired, the student/apprentice or teacher/researcher is not allowed to apply for another exemption under the existing section of the contract. Since the TCR is often a document consistent with the filing of the whT exemption, a foreign company that makes payments in China may be subject to double taxation until it has received the TCR. However, the CTR application must be filed on behalf of the Chinese party. If it does not tend to cooperate or is unable to effectively manage procedures, delays or resulting refusals could result in effective double taxation. The Certificate of Tax Residency is a legal document issued by the tax office which indicates that the company/foreign worker is tax compliant.
For foreign nationals working in China as well as for foreign companies operating as subsidiaries, the certificate is extremely useful when it comes to having a residence, income or residence in a country other than its origin. It is essential that the foreign company must work closely with the Chinese side to ensure the effective collection of documents, since the company that needs the CTR is based abroad and certain documents can only be completed or provided by the Chinese company. 2. Copy of form BIR No. 0605 relating to the payment of processing and certification fees for the aforementioned application, payable to the tax office responsible for the head office of the national body (see communication 30-02 on turnover). The source exemption under the double taxation agreement is automatically granted when the beneficiary informs the payer of the state of residence with which a dual tax agreement has been entered into. Asia Briefing Ltd. is a subsidiary of Dezan Shira Associates. Dezan Shira is a specialized foreign direct investment practice that offers multinational companies investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN, business advice, tax advice and compliance, accounting, wage regulations, diligence and financial review.