Sforzando Tax Common Sense｜Brief description of Profits Tax Return Profits Tax R

Posted by SFZ Professional Services on February 23rd, 2021

Profits tax declaration

If you operate a business as a company, partnership, or if a non-resident is liable to pay profits tax in your name, you should declare your profits on the profits tax return.

Who should declare profits tax?

Newly registered companies-Generally speaking, newly registered companies will receive their first profits tax return about 18 months after the company is established.
Continuing business-Profits tax return will be issued on the first working day of April each year.

If you have been previously assessed as being tax-free, you may not receive a profit tax return every year. However, when you need to pay tax, you must notify the Inland Revenue Department in writing within 4 months after the end of the base period of the relevant tax year. The tax bureau will issue a notification letter to review your tax obligations.

When to file taxes?

Generally speaking, the profits tax return should be submitted within 1 month from the date of issuance. The deadline for filing the tax return has been indicated on the first page of the profits tax return. You can apply for an extension of the time for filing your tax return, but you must get the approval of the Commissioner of Inland Revenue.

Submit Profits Tax Return

All items in the profits tax return must be filled in completely and correctly. The declaration form should be submitted on time together with the following documents (collectively referred to as "certification documents").

A certified statement of financial position/balance sheet, Hong Kong or foreign laws required or prepared auditor's report, and a comprehensive income/profit and loss statement during the base period; and
Method of calculating tax, and attach an attached table to explain how to calculate taxable profit (or adjusted loss).

Failure to submit a profits tax return

In all cases, if you cannot file your tax return by the due date or the extended due date, you will be issued an estimated assessment and may be required to pay more taxes. You may also be subject to punishment procedures, including paying fines and even being sued.