Welcome Message
Welcome to our website! We are now in the tax reporting season. As Covid-19 is still very much with us, and likely to be so in the next year, we are not taking any chances. We start our audit work sooner, rather than later. We reduce physical contacts by going through more documents online or in office. Meanwhile, our business services team is completing clients’ accounts earlier and helping the auditors to discharge their audit duties offsite. All these seem common sense and straight forward, because we have upgraded our devices and internet connections which, like a hungry child, always in need of attention.
Every April, we would receive panic calls/ emails of what to do with tax returns that (suddenly) arrive at the door steps. Well, Hong Kong does not practice a pay as you earn system. What’s more, the Inland Revenue does not even send out tax returns to a company they consider unlikely to have tax payable until that company:
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commences to earn an assessable profit (before deducting against tax losses brought forward); or
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disposes properties; or
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a Profit Tax Return is sent to it (approximately every 4 years).
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Thanks to the block extension practice of the Inland Revenue, the callers often return to calmness upon learning that the filing date for the profits tax return can be extended to as much as 6 months. Instead of the one month deadline as stated on the profit tax return, filing date for companies with December year end can be extended to mid-August and to mid-November in the case of a March year end, upon (a relatively simple) application by the tax representative. Nonetheless, the audit of their financial statements need to be attended to right away as audited figures are required for completion of the tax return.
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Our seasonal reminder to clients is that tax return or not, all Hong Kong companies need to maintain adequate accounting records made up to the adopted year end date and be subject to annual audit (this statutory requirement is totally separate from any need to submit profit tax return).