Get prepared to join us on a journey of thrilling discoveries by adding reminders in your calendar. To ensure you avoided penalties and were in compliance with tax deadline 2025, staying current was crucial in order to navigate all the paperwork while running your business peacefully.
It’s time for an advance notice of the year’s major tax deadline pouring into your calendar! Being at course with the tax deadline to file your tax is an important part of that process and can save you the penalties and non-compliance issues, which can give you peace of mind to run your core business.
Continue reading to get familiar with all the information pertaining to taxes in Hong Kong especially those related to small businesses which is without a doubt your kind as well.
Content Outline
Summary of Hong Kong’s Corporate Tax Rate
Hong Kong levies regular income tax in a territorial system. Put differently, tax is levied on the profits as generated by a business, profession, or trade that is established, operates, or provides for services in Hong Kong. If a source of earnings is money made outside Hong Kong, profits tax will not be enforced.
This amount sovereignty principle means that riders and non-riders are regarded in the same way.
For example, a Hong Kong resident with profits from outside of Hong Kong, will not be liable to the HK Government to pay profits tax. Hence, if a non- resident has a Hong Kong profit, then they must pay tax of profits.
Who is Required to File Tax Returns in Hong Kong?
New Businesses
Any company newly registered will obtain obligation to submit tax return and pay profits tax. Entities shall be produced their initial corporate tax return with 18 months since both their incorporation date, or starting of business.
Existing Businesses
For those businesses that will keep their operations, the corporate tax return should be delivered on the 1st working day in April, every year.
After the corporate tax deadline, a month is allowed from the date given for the filing to have all forms of corporate tax and supplementary returns.
Businesses exempt from annual return submission
Also not all businesses get corporate tax refunds. The Inland Revenue Department (IRD) has the right to say if they feel that your business activities still don’t reach the assessable profits. So your company may not be eligible for corporate tax refund. Nevertheless, in periods of no profits, returns on corporate income tax will still be required to be paid even if you are the recipient of the refunds. IRD does that sometimes for a quiz on them tax liability basis.
Freelancers and the self-employed
Are you the owner of the business running it as a partnership or sole proprietor? Income tax would have to be paid by sole proprietors or freelancers, regardless of what is earned in Hong Kong.
What is the Income Tax Basis Period in Hong Kong?
In Hong Kong Year of Assessment (YA), Corporate income tax is levied based on a territorial tax system which has also adopted a year-basis (YB) approach. The tax year runs from 1 April of one year to 31 March of the next year. Thus, this year ending on 31st of March 2025 as Year of Assessment 2024-2025.
When is the Tax Deadline?
As explained, active corporate entities and partnership firms shall receive an IRD profit tax return during first week of April annually. For companies with different sue year-end dates, the time of their profit tax returns will be different.
The yearly tax year on the other hand goes as follows have you noticed how hectic it could get for you to get it done with the calendar?
| Accounting date | Standard deadline | Extended deadline |
|---|---|---|
| 1 April – 30 November (N code) | 2 May of next year | No extension |
| 1 – 31 December (D code) | 15 August of next year | No extension |
| 1 January – 31 March (M code) | 15 November of the same year | 31 January of next year for companies with statutory loss * |
*The extension application must be submitted by October 31st at the latest.
Other key dates to keep in mind:
| What | When |
|---|---|
| Annual General Meeting (AGM) | Planning and holding an AGM within 18 months of the day of incorporation will be obligatory. It requires that the general body meet every year either at the end of the year or in the first quarter of the following year but not exceeding of two years since the last AGM. One schedule is due each and every calendar year (within 42 days of the initial incorporation of your firm, except for the first year of operation). |
| Annual Return (AR) | One schedule is due each and every calendar year (within 42 days of the initial incorporation of your firm, except for the first year of operation). |
Which tax forms are necessary?
You are required to file the following forms for your profits tax liability depending on whether your business is a partnership business, corporation, or a non-resident person,
- For persons other than corporations: Form BIR52
- For corporations: Form BIR51
- For non-resident persons: Form BIR54
Moreover, starting on the 1st of April next year, IRD has issued 18 supplementary forms on the Profits Tax Return (BIRS1 to BIRS18) for the taxpayers to report information regarding tax incentives or preferential regimes. These annex forms are a part of the annual profit tax form and must be attached along with it. Access the required supplementary forms and fill the form digitally and then print and sign the form to submit together with your tax return documents.
What incentives for taxation exist?
Foreign Investment Incentives
Hong Kong has no direct incentives for foreign funds but under some circumstances, the offshore fund might be accepted without taxation of its profits.
Foreign Tax Credits
This condition involves a similar situation as the foreign taxes paid by an other Hong Kong resident for income earned from a particular territory which has concluded a CDTA with Hong Kong and the same income is also subject to tax in Hong Kong. However, a foreign tax credit is offered for this. Foreign Tax Credit Claim is accessible to taxpayers only after they adopt all such reasonable measures as are necessary to reduce the tax liability to the payable limit.
How can I submit a corporate tax return?
You’re required to file your Profits Tax Return by yourself. To file corporate tax in Hong Kong, simply follow these steps:
- Step 1: Log into eTax account
- Step 2: Press on the “Submit Profits Tax Return” from the menu bar, then choose the “Continue as a Taxpayer”.
- Step 3: IRD’s instructions are clear to follow, so take the first step to apply today.
What are the consequences for filing taxes late?
Non-compliance with the rule is a big issue. If you fail to file your tax returns by the set tax deadline or extended due dates, the IRD will make the estimate of your assessment and begin penalty proceedings in accordance with section 80(2) or section 82A.
Should you break the rule, you are likely to be penalized with a fine without a maximum penalty limit. Furthermore, forgoing the unpaid tax by more than three times the original amount is also applicable.
How FastLane Group can help?
FastLane Group lends its expertise on the tax system in Hong Kong and aims at timely and up to compliance giving thus reducing penalties for businesses. Through bespoke strategies and timely support, FastLane Group enables businesses to address tax obligations systematically and enables them to do their regular operations with calmness.
