Departed from its general practice in the past, the tax authority in Hong Kong, the Inland Revenue Department (“IRD”), starts sending out the Property Tax Returns and Employer’s Returns for the year of assessment 2019/20 today, instead of the Profits Tax Returns. The IRD will be sending out the Profits Tax Returns and tax returns for individuals on 4 May 2020 and 1 June 2020, respectively.

In accordance with the regulations, a taxpayer who receives a tax return shall complete and submit it back to the IRD within a month of issue of the said return or any other time specified in the relevant return. Otherwise, the taxpayer may be subject to a fine for late filing of return.

As a taxpayers, in reporting and filing your tax return for year 2019/20, you are entitled to enjoy the various concessions announced by the Financial Secretary of Hong Kong on his 2020/2021 Budget, including a one-off reduction of profits tax, salaries tax and tax under personal assessment for the year of assessment 2019/20 by 100%, subject to a ceiling of HKD20,000 per case. IRD will make tax reduction in the final tax assessment for this year after the proposed concessionary measure is approved by the Legislative Council of Hong Kong. It is noted that no additional application for this proposed concessionary measure is required.

This concessionary measure is applicable for the year of assessment 2019/20, that is, they are applicable to the accounting year ended within the period from 1 April 2019 to 31 March 2020.

In addition, eligible taxpayers can also enjoy the benefit of the two-tiered profits tax rates regime. Under the two-tiered profits tax rates regime, the first HKD2 million of assessable profits of corporations and unincorporated businesses will be taxed at 8.25% and 7.5% respectively, whereas the remaining assessable profits above HKD2 million will be taxed at 16.5% for corporations and 15% for unincorporated businesses. Taxpayers must declare whether they will be taxed at two-tiered profit tax rates in their profits tax returns.

If Kaizen is the tax agent or company secretary of your Hong Kong company, we will contact you by email upon receipt of the tax return and discuss with you the declaration issues. If you do not hear anything from us before 30 June 2020, please contact us so as to make sure that our notice is not lost during its transmission.
 
Kaizen has a team of professional tax experts with extensive experiences and can provide Hong Kong tax filing services and handling the application for tax exemption on offshore profits derived by a Hong Kong registered company. For Hong Kong profits tax and the application for exemption from Hong Kong profits tax for offshore businesses in 2019/20, please refer to our website for related information:

1. Summary of Hong Kong Budget for 2020/21
2. The HKSAR Government Proposes to Reduce the Profits Tax for the Year of Assessment 2019-20
3. Introduction on Taxation of Hong Kong Companies Operating Offshore

Kaizen suggests you should seek for advices from professional tax advisors before taking actions.


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
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