Filing Requirements

In general, Profits Tax Return (“PTR”) must be completed and submitted to the Hong Kong Inland Revenue Department (“IRD”) within one month from the date of issuance of the tax return, along with the following documents (“collectively referred to as “Supporting Documents”):

a)	Certified copy of your Statement of Financial Position / Balance Sheet, Auditor’s Report where required by Hong Kong or foreign law or if one has otherwise been prepared, and Statement of Comprehensive Income / Profit and Loss Account in respect of the basis period;
b)	Tax computation with supporting schedules showing how the amount of Assessable Profits (or Adjusted Loss) has been arrived at; and
c)	Other documents and information as specified in the corresponding “Notes and Instructions” for the relevant tax return.

For corporations, audited financial statements should be submitted in all cases except:

a.	for “Small” corporations as defined in the relevant “Notes and Instructions”;
b.	for dormant companies within the terms of the Companies Ordinance;
c.	for companies incorporated in a jurisdiction whose laws do not require financial statements to be audited; and
d.	for Hong Kong branch of a foreign company provided that the following information is supplied together with the PTR:-
	i.	the place of incorporation of the foreign company,
	ii.	whether the laws of that country require a statutory audit of the world-wide financial statements of the company,
	iii.	whether the audit has been conducted, and
	iv.	a brief summary of the financial and accounting records maintained by the Hong Kong branch.

If your company is considered as a “Small” corporation, your company only needs to submit the PTR and any required supplementary forms. However, Supporting Documents are still required to be retained as IRD may require those to be submitted later.

You are a “Small” corporation if you satisfy all of the following conditions in the relevant year:

1.	Your gross income for the basis period does not exceed HK$2,000,000;
2.	You have not paid or accrued to a non-resident person any sum for the use of intellectual property specified in section 15(1)(a), (b) or (ba) of the Inland Revenue Ordinance (“IRO”) or for the assignment of performer’s right in section 15(1)(bb) of the IRO during the basis period for the relevant year;
3.	You do not have any deemed assessable profits pursuan to section 20AE, 20AF, 20AX and/or 20AY of the IRO in the relevant year;
4.	You do not claim deduction for R&D expenditure under section 16B of the IRO and/or you do not have trading receipts or sale proceeds from intellectual property rights generated from R&D activities for the relevant year;
5.	You do not claim deduction for expenditure on energy efficient building installation under section 16I of the IRO for the relevant year;
6.	You are not a ship owner;
7.	Your Assessable Profits / Adjusted Loss for the relevant year do not include any interest, profits / loss arising from “short / medium term debt instruments “ (issued before 1 April 2018)as defined in section 14A(4) of the IRO, any profits / loss of a professional reinsurer or an authorized captive insurer as stipulated in section 14B of the IRO, any qualifying profits / loss of a qualifying corporate treasure centre as defined in 14C of the IRO, nor include any qualifying profits / loss of a qualifying aircraft lessor or qualifying aircraft leasing manager as defined in section 14G of the IRO, which are subject to tax at one-half of the tax rate;
8.	You do not claim tax relief for the relevant year pursuant to an arrangement for avoidance of double taxation specified under section 49(1) or 49(1A) of the IRO;
9.	You have not obtained an advance ruling on any of your tax matter in relation to the relevant year;
10.	You do not claim debt treatment for an arrangement for this year of assessment as “an originator” or “a bond-issuer” of a specified alternative bond scheme under section 40AB and Schedule 17A of the IRO;
11.	You do not claim deduction for distribution arising from a regulatory capital security for the relevant year; and
12.	You are not a permanent establishment in Hong Kong of a non-Hong Kong resident person for the relevant year.

If additional time is needed to file your PTR, extension can be requested through a written letter. Further, if your company appointed a tax representative in Hong Kong, the deadline to file your PTR will also be normally be extended according to your accounting year end date. IRD normally grant extension as per below (actual date will be subjected to the annual tax arrangement):


Payment of Tax

Profits tax is chargeable on the assessable profits for each year of assessment. As the assessable profits for any particular year cannot be known until after the end of the year concerned, a provisional tax charge has to be raised. When the assessable profits for the year of assessment are subsequently ascertained, an assessment will be made and the provisional profits tax paid will be utilized to offset the tax liability under the assessment.

Section 71(1) of the IRO provides that tax charged under the provisions of this Ordinance shall be paid in the manner directed in the notice of assessment on or before a date specified in such notice. Any tax not so paid shall be deemed to be in default. If the first instalment is not paid by the date specified on the notice of assessment, the second instalment will become immediately due. The entire balance of the total tax payable in the notice of assessment remaining unpaid shall be deemed to be in default and will be immediately recoverable.

IRD will initiate recovery actions (including imposition of 5% surcharge on the entire balance of the demand notice, issue of recovery notice to third party and initiation of legal action, etc) as authorized by Part XII of the IRO for recovering the total outstanding amount.

Source：Hong Kong Inland Revenue Department’s website

- https://www.ird.gov.hk/eng/pdf/e51notes.pdf
- https://www.ird.gov.hk/eng/tax/bus_pft.htm
- https://www.gov.hk/en/residents/taxes/taxfiling/consequences/consequencenotpaytax.htm