In Hong Kong, each company needs to file tax return on annual basis (In China, tax filing is on monthly basis). Most clients will use 31/3 as fiscal year end (to be same as government but actually client is free to choose any other date).
Naturally, for small to medium business, accounting work and auditing work is done once a year as well.
Some of the key maintenance requirement of a Hong Kong limited company are :
- Duty to Business Registration Office ( BRO )
- Renew business registration.
- Duty to Company Registry ( CR )
File annual return once a year even though there is no change during the year in the shareholding, director or other information of the company.
During the year, file to the CR of any changes in the shareholding, directors etc, that need to be filed according to the Companies Ordinance. The information need to be filed and ready for public search in order to protect the interest of the company and the public.
- Duty to Inland Revenue Department ( IRD )
- File tax return to the IRD:
Profits Tax - once a year (Normally auditor's reported should be submitted together with tax returns);
Salaries Tax (Employer Return) - once a year - to advise salary payment to employees;
Maintain proper accounting books and records to produce financial statements for tax return filing for 7 years.
- Common misunderstanding
Even a non-active company need to file tax return. It is the IRD to assess whether a company need to pay tax or no need to file tax return.
Proper books and records need to be maintained in order to support any financial statements. IRD may ask how your accounting system works and how you keep your records. If it is not properly handled, IRD may be suspicious of the figures in financial statements. In certain situation, penalty or / and estimated assessment will be levied.