Q:
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What are your tax obligations as an employer in Hong Kong?
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A:
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Your tax obligations commences when you hire your first employee. You need to:
1.
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keep sufficient payroll records for your employees for at least 7 years, such as employee’s personal particulars, nature of employment, capacity in which employed, amount of cash remuneration, non-cash and fringe benefits, employer’s and employee’s contributions to the Mandatory Provident Fund or its equivalent, employment contract and amendments to terms of employment and period of employment; and
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2.
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report remuneration paid to employees by submitting annual Employer’s Return and/or Notification Forms.
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Q:
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I received an Employer’s Return (BIR56A) from the Hong Kong Inland Revenue Department. Do I still need to submit that even if I do not have any employee yet?
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A:
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Yes, you are still required to complete it and lodge with the Hong Kong Inland Revenue Department within 1 month from the date of the issuance even if:
1.
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you do not hire any employee or;
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2.
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the business has not commenced or;
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3.
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the business has ceased.
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Q:
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Do I need to report remuneration paid to all employees on my Employer’s Return?
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A:
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For the year of assessment 2019/20, you have to report the employee on your Employer’s Return only if he or she is:
1.
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single and paid an annual income of HK$132,000 or more;
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2.
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married (regardless of amount);
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3.
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a part-time staff (regardless of amount);
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4.
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a director (regardless of amount).
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Q:
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What are the Notification Forms and when are the statutory period for notification?
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A:
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The Notification Forms need to be submitted by an employer when an employee meets following employment conditions:
Employment Condition
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Form to Complete
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Statutory Period of Notification
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Commencement of employment
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IR56E
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Within 3 months
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Cessation of employment
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IR56F
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No later than 1 month before cessation
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Departure from Hong Kong
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IR56G
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No later than 1 month before departure
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Q:
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We close our accounts on 31 December. Can we file Employer’s Return in accordance with our accounting date?
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A:
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No, the basis period for Salaries Tax runs from 1 April of the current year to 31 March of the succeeding year. Hence, Employer’s Return must be completed for the relevant year ended 31 March.
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FAQ
