Hong Kong: Domestic Corporate Taxation
Filing Requirements and Payments of Tax
The tax year starts on April 1. The assessment to profits tax is provisional and is based on the previous year's assessable profits with 75% of the assessment being due by the 3rd quarter and the final 25% being due at the year-end. Tax payments delayed less than 6 months are subject to a 5% non-deductible surcharge whereas payments overdue by more than 6 months are subject to a 10% non-deductible surcharge. A tax credit is granted where the previous year's assessment exceeds the currents year's assessable profits.
Corporations and partnerships may be able to file their profits tax returns for 2009/10, 2010/11 and 2011/12 that are issued on or after 1 April 2010 electronically using the eTAX system. However, businesses must satisfy a number of conditions in order to use this internet filing service. These conditions include: a corporation’s gross income should not exceed HKD2m (US$257,000); it should not be claiming a foreign tax credit; it should not have obtained an advance ruling on any of its tax matter in relation to that year of assessment; and it should not have paid or accrued to a non-resident person any sum for the use of intellectual property.
A partnership must satisfy all of the conditions applicable to a corporation. In addition, it cannot have more than six partners during the basis period for that year of assessment (including those partners who have retired); and all of its partners should be individuals.
In April 2012, the government reminded individual taxpayers to file their 2011/2012 tax returns by June 2, while sole proprietors of unincorporated businesses had until August 2. An automatic one-month extension was granted to e-filers.
In a bid to make paying tax easier, the Hong Kong government launched a scheme on August 1, 2012, whereby cash payment of salaries tax, profits tax, property tax, tax under personal assessment, business registration fees and e-stamping payments will be accepted at more than 1,000 convenience stores across the city. The maximum limit for each transaction is HKD5,000, and part payment is not accepted for business registration fees.