Form CD22 Application for Tax Exemption Section 88 Hong Kong

Form CD22 Application for Tax Exemption Section 88 Hong Kong

The form cd22 application for tax exemption section 88 hong kong is the official document used to apply for recognition as a charitable institution or trust of a public character under the Inland Revenue Ordinance (Cap. 112). The Inland Revenue Department (IRD) processes this application to determine whether an organisation qualifies for exemption from profits tax, property tax and, in some cases, salaries tax on its charitable activities. Approval under section 88 is the standard route through which non-profit entities obtain tax-exempt status in Hong Kong.

Eligibility for Section 88 Exemption

Charitable Institution and Trust of a Public Character

Only organisations that are established exclusively for charitable purposes can obtain exemption. The IRD applies the English common law definition of charity, which includes four recognised heads: the relief of poverty, the advancement of education, the advancement of religion, and other purposes beneficial to the community that are charitable in law. The organisation must be a charitable institution or a trust of a public character; private trusts or entities operating for the benefit of a closed group do not qualify.

Objects and Constitution Requirements

The organisation's founding documents must confine its objects to charitable purposes. For a company limited by guarantee, the memorandum and articles of association must state that the company is formed for charitable objects and that any surplus or profits will be applied solely towards those objects. A trust deed must contain equivalent provisions. The constitution should also prohibit the distribution of income or property to members, directors or trustees. Any commercial or trading activity must be incidental to the charitable main purpose.

Non-profit Status

An applicant must demonstrate that it operates on a non-profit basis. This means no part of the organisation's income or property may be payable or transferable to its members, directors or officers. Upon dissolution, any remaining assets must be transferred to another charitable institution with similar objectives. The IRD reviews these clauses carefully during the application process.

CD22 Form Section 88 Exemption

How to Complete Form CD22

Form CD22 is available from the IRD's website or its offices. The form requests basic particulars of the applicant: the organisation's name, address, date of establishment, type of entity (company, trust or unincorporated association), and the names and addresses of its directors or trustees. The applicant must state the charitable objects and describe the activities it carries out or proposes to carry out. The form also asks whether the organisation has been issued a business registration certificate and, if so, to provide the certificate number.

Supporting Documents Required

A complete application must include several supporting documents. These are:

• A copy of the organisation's constitution (memorandum and articles of association for a company, trust deed for a trust, or rules for an unincorporated association).
• A copy of the business registration certificate, if issued.
• Financial projections or a budget for the next three years, showing expected income and expenditure.
• A detailed description of the charitable activities and how they benefit the public.
• Copies of any correspondence with other government departments or regulatory bodies.

The IRD may also request additional documents, such as annual reports, audited accounts, or a copy of a tax reserve certificate if the organisation has paid tax and seeks a refund.

Hong Kong Tax Exemption Application Procedure

Submission to the Commissioner of Inland Revenue

The completed Form CD22 and supporting documents must be sent to the Commissioner of Inland Revenue at the IRD's headquarters. There is no prescribed fee for the application. The IRD evaluates the application against the criteria in section 88 and the common law definition of charity. The commissioner of inland revenue has discretion to approve or reject the application, and may impose conditions on the exemption, such as requiring annual accounts or activity reports.

Processing Time and Approval

Processing times vary. Simple applications with complete documentation may be processed within three to six months. Complex cases or applications requiring clarification can take longer. During the review, the IRD may write to the applicant with queries. It is important to respond promptly and fully to avoid delays. If the application is approved, the IRD issues a letter confirming the exemption, which the organisation should keep as evidence of its tax-exempt status.

Inland Revenue CD22 Filing Requirements

Changes to Particulars

Once an organisation has received section 88 exemption, it must notify the IRD of any changes to its particulars. This includes changes to the organisation's name, address, objects, directors or trustees, or constitutional documents. The IRD may ask the organisation to update its file by submitting a revised constitution or other documents. Failure to notify changes may result in the revocation of the exemption.

Annual Obligations

Exempt charities are not required to file profits tax returns, but the IRD may ask them to submit annual accounts or activity reports to confirm they continue to meet the exemption criteria. Organisations should maintain proper books and records and keep the IRD informed of any material changes in their operations.

Charitable Institution Tax Exemption Maintenance

Consequences of Non-compliance

If an exempt charity ceases to be a charitable institution or a trust of a public character, for example by amending its constitution to include non-charitable objects, the exemption lapses. The IRD may revoke the approval and assess tax on income earned from the date the organisation ceased to qualify. Similarly, if an organisation trades commercially without the IRD's consent, the trading profits may be taxed.

Transition to Electronic Filing

The IRD has stated an intention to move towards full electronic filing of tax returns and forms by 2030. While Form CD22 is currently a paper form, applicants should check the IRD's website for any updates on electronic submission channels. The inland revenue department's forms index at https://www.ird.gov.hk/eng/paf/bus.htm provides the latest version of Form CD22 and related guidance.

Where to Obtain Form CD22

Form CD22 can be downloaded from the Inland Revenue Department's website or collected from any IRD office. Always use the current version of the form, as the IRD revises forms periodically. Stale copies may be rejected. The IRD's forms index should be the primary source for the form and any accompanying instructions.