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Tax Ordinance in Hong Kong

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Profits Tax Return

If you carry on a trade, profession or business in form of a corporation, partnership business or if a non-resident person is chargeable to profits tax in your name, you should complete the profits tax return and file it to the Inland Revenue Department (IRD) by the due date. This article will give you details on profits tax returns.

Types of Profits Tax Returns

Profits tax returns are issued to Corporations and Partnership Businesses for profits tax purposes. Profits from the carrying on of sole proprietorship business should be reported in Tax Return - Individuals (B.I.R. 60).

There are 3 series of profits tax return forms. You may download a specimen of the tax return forms for reference, but you should not use a printed copy of the specimen form for filing purposes

·           Profits Tax Return - Corporations (B.I.R. 51)

http://www.ird.gov.hk/eng/pdf/ebir51.pdf

·           Profits Tax Return - Persons Other Than Corporations (B.I.R. 52)

http://www.ird.gov.hk/eng/pdf/ebir52.pdf

·           Profits Tax Return - In Respect Of Non-Resident Persons (B.I.R. 54)

http://www.ird.gov.hk/eng/pdf/bir54.pdf

Who Should File

Newly Registered Business

Generally, a newly registered business will receive its first profits tax return some 18 months after the date of commencement of business or the date of incorporation.

Continuing Business - Annual Bulk Issue of Returns

The annual exercise to issue profits tax returns in bulk takes place on the first working day of April each year.

Business Not Required to Submit Return Annually

It is the practice of IRD not to call for the annual submission of profits tax returns in instances where the trade, profession or business carried on does not give rise to assessable profits or where the trade, profession or business has not commenced or has ceased and not recommenced. However, upon receipt of a profits tax return which may be issued from time to time in the course of reviewing your future tax potential, the requirement to lodge the return form must still be complied with.

When to File

Normal Filing Time

Generally, profits tax return should be filed within 1 month from the date of issue. The compliance date of submission is specified on page 1 of the profits tax return.

Block Extension Scheme for Lodgement of 2008/09 Tax Returns

If you make up your annual accounts for the trade, profession or business after 30 November and your tax representative has duly applied for an extension to file your 2008/09 profits tax return under the Block Extension Scheme, the due date is normally extended as follows:

Extended Due Date

Accounting Date

15 August 2009

for D Code Returns
(Accounting Date between 1 to 31 December)

16 November 2009

for M Code Returns
(Accounting Date between 1 Jan to 31 March)

1 February 2010

for M Code Returns
and Current Year Loss Cases

 

In the beginning of each year, IRD publishes a Circular Letter to tax representatives on the IRD website (in the “Tax Representatives’ Corner” under the menu of “Tax Information – Individuals/Businesses”), setting out details of the block extension scheme lodgement arrangements for the year and how the block extension can be applied for.

·           More information on Block Extension Scheme for Tax Representatives

http://www.ird.gov.hk/eng/ese/bes.htm

Application for Extension for the Submission of Return

Apart from the block extension scheme, you can apply for extension of time for submission of returns in writing. An explanation of why lodgement cannot be made on a timely basis, together with supporting evidence, must accompany the application.

Know more about the completion and filing of return and the consequences of failure to submit tax return on time through the following link:

·           Completion and Filing of Return