The Hong Kong Inland Revenue Department (IRD) sent out about 190,000 profits tax returns, 130,000 property tax returns and 310,000 employers’ returns for the year 2018/19 on April 1, 2019; a total of 2.68 million tax returns for individuals will be sent out on 2 May.

On 27 February 2019, the Financial Secretary of Hong Kong, Mr. Paul Chan, delivered 2019/2020 Budget. He proposed a one-off reduction of profits tax, salaries tax and tax under personal assessment for the year of assessment 2018/19 by 75%, subject to a ceiling of HK$20,000 per case.IRD will make tax deduction in tax returns for this year after the budget approved by the Legislative Council of Hong Kong.

This concessionary measure is applicable for the profits tax for the year of assessment 2018/19, that is, for the accounting period from 1 April 2018 to 31 March 2019. No additional application for this proposed concessionary measure is required. Taxpayers shall file their profits tax returns as usual.

The two-tiered profits tax rates regime will be applicable from the year of assessment 2018/19.Under the two-tiered profits tax rates regime, the profits tax rate for the first HK$2 million of assessable profits will be lowered to 8.25% for corporations and 7.5% for unincorporated businesses. Assessable profits above HK$2 million will continue to be subject to the tax rate of 16.5% for corporations and standard rate of 15% for unincorporated businesses. Taxpayers must declare whether they will be taxed at a two-tiered profit tax rates regime in their profits tax returns for the year of assessment 2018/19.

In accordance with the regulation, a Hong Kong company who receives a tax return shall submit it to the IRD within a specified date. Otherwise, a fine may be imposed by IRD

If Kaizen is already your company's designated tax agent, we will contact you after receiving the tax return issued by the IRD of Hong Kong to discuss the declaration issues. Please pay attention and reply us in time to avoid any delay for tax declaration.

Kaizen has professional teams and extensive experience and can provide Hong Kong tax filing services and profits tax exemption application services for offshore business in Hong Kong. For Hong Kong profits tax and the exemption application from Hong Kong profits tax for offshore businesses in 2018/19, please refer to our website for related information:

1. The HKSAR Government Proposes to Reduce the Profits Tax for the Year of Assessment 2018-19
2. Introduction on Taxation of Hong Kong Companies Operating Offshore

Kaizen suggests you consult the professional advice of tax advisors before taking actions. Should you have any questions in relation to the proposals, please feel free to contact our CTAs in Hong Kong.

Benjamin HP Yen
Tax Partner
T: +852 2270 9768
E：benjamin.yen@kaizencpa.com

Vicki Wong
Tax Manager
T: +852 2270 9725
E: vicki.wong@kaizencpa.com


If you wish to obtain more information or assistance, please visit the official website of Kaizen CPA Limited at www.kaizencpa.com or contact us through the following and talk to our professionals:
Email: info@kaizencpa.com, enquiries@kaizencpa.com
Tel: +852 2341 1444
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