arriving in the Mainland or ending in the month leaving the Mainland during
the course of the counting method.
project shall In Hong
be adopted for the purposes Kong, the term “month” is
Interpretation and General Clauses Ordinance (Cap. 1) as “calendar In its ordinary meaning, month (calendar month) means a period
month”. of time
between the same dates days (365 days divided
in successive calendar months; a period of around 30 by 12); a period of 28 days or a period of 4 weeks.
For the purposes of paragraph 3(2) of term “month” to be a period of 30 enterprise has furnished services in
Article 5, Hong Kong considers that the days. In counting whether a Mainland Hong Kong “for a period or periods
aggregating more add together each
than 6 months within any time period that services
12-month period”, Hong Kong will have been provided in Hong Kong
the length number of
of the time period) within any 12-month period. If days during the time period or time periods during
the cumulative which services
been provided in Hong Kong within that 12-month period Hong Kong would consider that the Mainland enterprise has
exceeds 180 a permanent
establishment in Hong Kong.
With effect from 11 June 2008, the term
was repealed and substituted
under Article 3 of 12-month period
“6 the the
cumulative number of enterprise of One Side be regarded as having
days during in the Other a permanent
which services have been provided by an Side exceeds 183 days, that enterprise will establishment in the Other Side. For the
transitional “183 days”
rule will only
Kong agreed with the Mainland that the new to those services which commenced after, and
which the employees effective date of the
rendering such services arrived at Hong Second Protocol. For those enterprises
commenced to provide services in Hong Kong prior to the effective date of Second Protocol, the original “6 months” rule will still be adopted determining whether they have a permanent establishment in Hong Kong.
Whilst the method of counting the “183 days” was not stated in the Second Protocol, both Sides will in practice use the “days of physical presence” method. The day when one is in the Other Side, and the day of arrival or departure, irrespective of the duration and the purpose of the stay, will be counted as one day. This is because it is difficult if not impossible for the tax authority to ascertain, and for the taxpayers to prove, whether services were rendered on any particular day of presence in the jurisdictions concerned.