Hong Kong - Residence

Article 4. Resident

Definition tax residence (lid 1)

1.   For the purposes of this Agreement, the term “resident of a Contracting Party” means:

a)   in the case of the Netherlands, any person who, under the laws of the Netherlands, is liable to tax therein by reason of his domicile, residence, place of management or any other criterion of a similar nature. This term, however, does not include any person who is liable to tax in the Netherlands in respect only of income from sources in the Netherlands;

b)  in the case of the Hong Kong Special Administrative Region,

(i)   any individual who ordinarily resides in the Hong Kong Special Administrative Region;

(ii)  any individual who stays in the Hong Kong Special Administrative Region for more than 180 days during a year of assessment or for more than 300 days in two consecutive years of assessment one of which is the relevant year of assessment;

(iii) a company incorporated in the Hong Kong Special Administrative Region or, if incorporated outside the Hong Kong Special Administrative Region, being normally managed or controlled in the Hong Kong Special Administrative Region;

(iv) any other person constituted under the laws of the Hong Kong Special Administrative Region or, if constituted outside the Hong Kong Special Administrative Region, being normally managed or controlled in the Hong Kong Special Administrative Region;

Tie breaker – dual residence individuals (lid 2)

3.   Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting Parties, then his status shall be determined as follows:

a)   he shall be deemed to be a resident only of the Contracting Party in which he has a permanent home available to him; if he has a permanent home available to him in both Contracting Parties, he shall be deemed to be a resident only of the Contracting Party with which his personal and economic relations are closer (centre of vital interests);

b)  if the Contracting Party in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either Contracting Party, he shall be deemed to be a resident only of the Contracting Party in which he has an habitual abode;

c)   if he has an habitual abode in both Contracting Parties or in neither of them, he shall be deemed to be a resident only of the Contracting Party of which he is a national (in the case of the Netherlands) or in which he has the right of abode (in the case of the Hong Kong Special Administrative Region);

d)  if he is a national of the Netherlands and has also the right of abode in the Hong Kong Special Administrative Region or if he is not a national of the Netherlands nor does he have the right of abode in the Hong Kong Special Administrative Region, the competent authorities of the Contracting Parties shall settle the question by mutual agreement.

Tie breaker – dual residence corporations (lid 3)

4.   Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting Parties, the competent authorities of the Contracting Parties shall endeavour to settle the question by mutual agreement. In the absence of such an agreement, such person shall not be entitled to claim any benefits under this Agreement, except that such person may claim the benefits of Articles 23 (Non-discrimination) and 24 (Mutual Agreement Procedure), and the competent authorities may determine by mutual agreement the mode of application of the rest of this Agreement to that person.