Profits tax

PROFITS TAX

General information

Persons, including corporations, partnerships, trustees and bodies of persons carrying on any trade, profession or business in Hong Kong are chargeable to tax on all profits (excluding profits arising from the sale of capital assets) arising in or derived from Hong Kong from such trade, profession or business. There is therefore no distinction made between residents and non-residents.

Taxpayer’s duty

Inland Revenue Department (IRD) will normally issue first profits tax return after 18 months of company incorporations.

In subsequent year of assessment, IRD will issue the profit tax return in April.

In normal situation, tax return has to be filed to IRD within 1 month (first return: within 3 months) of issuing, or the authorized representatives may apply the extension of time for submission for taxpayers.

For “Corporations” (Limited company), profit tax return filing has to be attached with audited financial statements and tax computation for tax assessment purposes.

Late filing of tax return, it is an offense. It will lead to a fine or even prosecutions.

Here is the simple test for “Corporation” to find out the deadline of submission date: “Click me”.

Basis Period Profits Tax Rate

Basis Period

The basis period is either:

  1. the year ended 31 March during the relevant year;
    (Example: 2008/09 year of assessment, the basis period would be from 1 April 2008 to 31 March 2009)
  2. where the financial accounts are made up to any day other than 31 March, the year ended on that day in the relevant year;
    (Example: If the accounts up to 31 December each year, for 2008/09 year of assessment, the basis period would be from 1 January 2008 to 31 December 2008)

Profits Tax Rate

Normal rate (for the year of assessment 2008/09 onwards)
Corporations (Limited company): 16.5%
Unincorporated Businesses: 15%

Extended due date of tax return

Year ended date Extended due date
31 December taxpayers 15 August
31 March taxpayers 15 November
31 March taxpayers with current year losses 31 January

For further information about our tax services, please contact us at (852) 2563 0032 or by email.

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