When will a Hong Kong company receive a Profits Tax Return?
The Hong Kong Inland Revenue Department (IRD) usually sends out the first Profits Tax Return to newly established companies about 18 months after the date of incorporation. For non-newly established companies, the Inland Revenue Department usually sends out Profits Tax Returns to companies on the first working day of April each year. These returns need to be submitted to the Inland Revenue Department by the prescribed deadline. Before submitting the tax returns, the company needs to prepare the relevant financial statements and documents required for tax filing.
Hong Kong company accounts and tax returns - how to determine whether their company is able to zero tax return (with and without the operation of the norms)
Hong Kong companies that do not operate can directly enjoy zero tax return, there are operating companies will have to do the accounts, in order to file tax returns. Of course, in a sense, as long as you are in the name of the company to carry out commercial transactions or activities, even if it is operational affairs. To be from the written record, can be judged by the following aspects, fit one of the aspects of the operating business:
1. The company has left operation records in the bank account;
2. The company has left import and export records in the government customs and logistics companies;
3. The company has a purchase and sale relationship with Hong Kong merchants;
4. The company employs employees in Hong Kong;
5. The company is allowed or authorized to use patents, trademarks and other information in Hong Kong;
6. The company obtains permission or authorization to use movable property in Hong Kong to collect rent, lease fees and other money;
7. The company is entrusted to sell in Hong Kong;
8. Other profits derived or generated in Hong Kong.
Introduction to Major Taxes in Hong Kong
1. Profits Tax (CIT): Tax is payable on assessable profits arising in or derived from Hong Kong from a trade, profession or business carried on in Hong Kong (except profits from the sale of capital assets). The current profits tax rate is 16.5%.
2. Salaries Tax: Salaries Tax is the equivalent of Personal Income Tax in China. It is a tax payable by an individual at progressive rates on his/her income arising in/from Hong Kong during the year, including salaries, allowances, bonuses, directors' emoluments, etc., after deducting "allowances" from his/her income.
Hong Kong Tax Benefits
With effect from the year of assessment 2018/19, a two-tier profits tax system will be implemented, whereby the profits tax rate for the first $2 million of a Hong Kong company will be reduced from 16.5% to 8.25%, i.e. half of the profits tax rate, and the profits thereafter will continue to be assessed at the standard tax rate of 16.5%.