Compliance is a critical responsibility for every business in Hong Kong, and two key annual filings—the Annual Return (AR) and the Profits Tax Return (PTR) play distinct but equally important roles. The Annual Return is an administrative document that provides an overview of your company’s structure, including directors, shareholders, and company secretary, while the Profits Tax Return is a financial report used by the Inland Revenue Department (IRD) to assess and collect taxes based on your company’s profits. Missing deadlines for either filing can result in fines, penalties, or legal action, making it essential for business owners to understand their differences, requirements, and deadlines. In this blog, we will guide you through both filings, helping you manage compliance efficiently and protect your company’s financial and operational health.
Key Summary
Different Purposes
AR updates company info with the Companies Registry. PTR reports profits and tax to the IRD.
Filing Requirements
AR needs company details. PTR needs audited accounts, tax computation, and forms S1–S22.
Deadlines & Methods
AR is due 42 days after incorporation anniversary. PTR deadlines depend on the financial year. eTAX filing is mandatory from 2025/26.
Penalties
Late AR: HK$870–HK$3,480. Late or wrong PTR: fines, extra tax, or prosecution.
Compliance Benefits
Timely filing keeps your company in good standing. It supports audits, bank loans, and investor confidence.
What Is An Annual Return?
An Annual Return (Form NAR1) is a mandatory document that every registered company in Hong Kong must file with the Companies Registry (CR) under the Companies Ordinance (Cap. 622). It serves as a formal update of the company’s key details including directors, shareholders, company secretary, registered office, and share capital to ensure that the public record accurately reflects the company’s latest information.
Think of the Annual Return as a “corporate health check” rather than a financial report. It doesn’t disclose profits or tax details but focuses on the company’s structural and administrative data. The main purpose is to promote transparency, maintain up-to-date company information, and help avoid compliance issues that may arise from outdated records. Timely filing also reinforces the company’s credibility and good standing in Hong Kong’s business environment.
Read: Things You Should Know About Annual Return (NAR1) Filling
Information Required
When preparing your Annual Return, you’ll need to include the following details:
- Company name, registration number, and company type (e.g., private, public, or limited by guarantee)
- Registered office address
- Details of directors, shareholders, and company secretary, including any recent changes
- Share capital information — issued shares, allotments, and structure
- Particulars of mortgages or charges, if applicable
Providing accurate and complete information helps ensure that your company remains compliant with the Companies Registry’s regulations and avoids unnecessary penalties or administrative complications.
When and How to File The Annual Return
In Hong Kong, every company must file its Annual Return (Form NAR1) within 42 days after its incorporation anniversary date each year. This deadline is strictly enforced by the Companies Registry (CR), and missing it can lead to escalating penalties.
Companies can choose between two main filing options:
- e-Registry (Online Filing): The recommended method for its speed, convenience, and tracking features. The Companies Registry’s e-Registry portal allows 24/7 electronic submission, ensuring accuracy and timely delivery.
- Paper Filing: Companies can also file in person or by mail, though this traditional option is slower and may risk postal delays or processing errors.
The government filing fee for an Annual Return is HK$105 for private companies and HK$140 for public companies. To avoid rejection, companies should double-check all submitted details, ensure signatures are included, and verify that all data matches official company records. Common mistakes include late submission, incorrect information, or missing signatures, all of which can result in compliance issues or delays.
Penalties for Late Filing
Failure to file the Annual Return on time can lead to escalating penalties imposed by the Companies Registry. The late filing fees are as follows:
- HK$870 – up to 1 month late
- HK$1,740 – more than 1 month but less than 3 months late
- HK$2,610 – more than 3 months but less than 6 months late
- HK$3,480 – over 6 months late
Consistent or deliberate late filing may also lead to more severe consequences, including company strike-off from the register or even prosecution of responsible officers. To maintain good standing and avoid unnecessary penalties, companies should mark their filing deadlines carefully and consider using professional support to ensure timely compliance.
What Is a Profits Tax Return (PTR)?
A Profits Tax Return (PTR) is an official document issued by Hong Kong’s Inland Revenue Department (IRD) to report a company’s annual financial performance and tax liability. Unlike the Annual Return, which focuses on company structure, the PTR is all about how much profit your business made and how much tax it owes. It’s a core part of maintaining tax compliance under the Inland Revenue Ordinance (Cap. 112).
Starting from the 2025/26 Year of Assessment, all businesses must file their PTR electronically through the eTAX platform, marking a full transition to digital tax administration in Hong Kong. Paper filings will only be accepted in exceptional cases with prior IRD approval.
Different forms are used based on the business type:
- BIR51 – for corporations
- BIR52 – for unincorporated businesses (such as sole proprietorships or partnerships)
- BIR54 – for non-resident businesses earning Hong Kong–sourced income
The profit tax return requires audited financial statements, a tax computation, and supporting schedules that detail how the assessable profits were determined. It serves as the government’s main tool to ensure that each business accurately declares and pays its profits tax.
Read: Hong Kong Tax Return Guide: Profits Tax Return (BIR51 / BIR52 / BIR54)
Filing Timeline and Codes
The IRD issues Profits Tax Returns on the first working day of April each year, officially signaling the start of Hong Kong’s tax season. The filing deadlines depend on your company’s accounting year-end, which determines the return code assigned by the IRD:
| Return Code | Accounting Year-End | Standard Due Date | Extended Due Date (e-Filing) |
| N Code | 1 April – 30 November | Early June | 2 June (following year) |
| D Code | 1 – 31 December | 15 August | 15 September |
| M Code | 1 January – 31 March | 17 November | 17 December |
| M Code (Current Year Loss) | 1 January – 31 March (loss-making cases) | 2 February (second year) | 2 February (second year) |
Aligning your financial year-end with the IRD’s filing schedule helps streamline compliance and reduces the risk of missing deadlines. Companies are strongly encouraged to prepare their audited accounts early to ensure accurate and timely submission through the eTAX system.
Documents to Include In Profits Tax Return
When filing your Profits Tax Return (PTR) in Hong Kong, it’s essential to prepare and submit all supporting documentation accurately to the Inland Revenue Department (IRD). These documents provide a clear picture of your business’s financial activities and ensure your tax assessment is based on verified data.
Here’s what must be included:
- Audited Financial Statements – These must be prepared and signed by a Hong Kong Certified Public Accountant (CPA). The audit verifies your company’s financial position, income, and expenses for the assessment year.
- Tax Computation – A detailed calculation showing how your assessable profits or losses were derived. This should include allowable deductions, adjustments for non-deductible expenses, and applicable tax incentives.
- Supporting Schedules and Supplementary Forms (S1–S22) – Depending on your company’s business activities, additional forms may be required.
- S1 – Election for the two-tiered tax rates (8.25% on the first HK$2 million, 16.5% thereafter)
- S2 – Disclosure of related-party or cross-border transactions (transfer pricing)
- S3 – R&D tax incentive declaration for qualifying innovation expenses
- S4 – Deductions for energy-efficient improvements
- S19–S22 – Forms for foreign-sourced income reporting, tax certainty schemes, or IP-related tax incentives
Providing complete and accurate documentation not only speeds up IRD’s review process but also reduces the risk of queries or reassessments later.
Read: Things You Should Know About Annual Return (NAR1) Filling
Penalties for Late or Incorrect Filing
Failure to file your Profits Tax Return on time or providing inaccurate information can result in significant penalties under the Inland Revenue Ordinance (Cap. 112). The IRD takes compliance seriously, and penalties escalate depending on the severity of the breach.
The consequences include:
- Fixed Fines – Ranging from HK$1,200 to HK$3,000 for late submission or incomplete returns.
- Additional Tax – The IRD may impose up to three times the amount of underpaid tax if the return is incorrect, incomplete, or misleading.
- Prosecution (Section 82A, IRO) – For deliberate or repeated non-compliance, the IRD may pursue criminal prosecution, which can lead to a fine of up to HK$50,000 and/or imprisonment for up to three years.
Ensuring accuracy, maintaining proper records, and meeting deadlines are essential to avoid penalties. Partnering with a qualified Hong Kong tax advisor helps businesses stay compliant and safeguard against costly mistakes.
Read: Profit Tax in Hong Kong
Annual Return vs Profits Tax Return: Key Differences
While both the Annual Return (AR) and the Profits Tax Return (PTR) are mandatory filings for Hong Kong companies, they serve very different purposes and are submitted to different government authorities. Understanding these distinctions is crucial for maintaining full compliance and avoiding unnecessary penalties.
| Feature | Annual Return (AR) | Profits Tax Return (PTR) |
| Purpose | Update company information and confirm details such as directors, shareholders, and registered office. | Report income, calculate assessable profits, and determine the tax payable to the IRD. |
| Filed With | Companies Registry (CR) | Inland Revenue Department (IRD) |
| Requires Audit | No | Yes – audited by a Hong Kong Certified Public Accountant (CPA). |
| Includes Financial Data | No | Yes – includes audited financial statements and tax computations. |
| Deadline | Within 42 days after the company’s incorporation anniversary. | Based on the accounting year-end (N, D, or M Code) as assigned by the IRD. |
| Filing Method | e-Registry (online) or paper submission. | eTAX (mandatory from the 2025/26 assessment year). |
| Government Fee | HK$105 (private company) / HK$140 (public company). | No filing fee, but audit and tax preparation costs apply. |
| Penalties | HK$870–HK$3,480 depending on delay. | Fines, additional tax (up to three times the underpaid amount), or prosecution under the Inland Revenue Ordinance. |
In summary, the Annual Return focuses on keeping your company’s registration details current with the Companies Registry, while the Profits Tax Return deals with your company’s financial performance and tax obligations to the Inland Revenue Department. Both are essential for demonstrating compliance, transparency, and good corporate governance in Hong Kong.
Why Timely Filing Matters
Filing your Annual Return (AR) and Profits Tax Return (PTR) on time is more than just meeting legal obligations — it’s about protecting your business credibility and financial health. Timely filing helps you avoid unnecessary fines and legal exposure, which can quickly escalate with delays. It also preserves your company’s public standing with the Companies Registry and the Inland Revenue Department, reinforcing your reputation as a compliant and trustworthy business. Moreover, keeping filings up to date ensures your company remains eligible for government incentives, tax reliefs, and business support schemes. Accurate and punctual submissions also simplify audits, strengthen your position for bank loans, and enhance investor confidence, helping your company operate smoothly and grow sustainably.
Common Compliance Mistakes To Avoid
Even well-managed companies can make costly compliance errors if they overlook filing details. Here are some of the most frequent mistakes to watch out for:
- Confusing Annual Return and Profits Tax Return deadlines – Many businesses mistakenly assume both returns share the same due date, but each follows a separate timeline and authority.
- Neglecting proper financial records – Inaccurate bookkeeping can delay audits and complicate tax filings, leading to IRD queries or penalties.
- Submitting outdated director or shareholder details – Annual Returns must always reflect current company information to stay compliant with the Companies Registry.
- Missing e-filing readiness for 2025/26 – With the IRD moving fully to eTAX filing, businesses must prepare systems and authorizations in advance.
- Skipping professional review before submission – Errors in either return can lead to rejections, fines, or tax reassessments. Always have a qualified advisor or CPA review your filings to ensure full accuracy and compliance.
Timely, accurate, and professionally reviewed filings not only prevent regulatory issues but also position your company for smoother operations and future opportunities in Hong Kong’s competitive business environment.
Conclusion
Both the Annual Return (AR) and Profits Tax Return (PTR) are essential filings for Hong Kong companies, serving distinct purposes: annual return ensures corporate transparency by updating company information with the Companies Registry, while profits tax return ensures tax compliance by reporting assessable profits to the Inland Revenue Department. Timely and accurate submission of both filings is critical to avoid escalating fines, additional tax liabilities, and potential legal consequences. Engaging professional support can streamline compliance, optimize filing processes, and allow business owners to focus on growth with confidence.
How FastLane Group Can Help
FastLane Group simplifies the compliance process for Hong Kong companies by providing expert guidance for both Annual Return and Profits Tax Return filings. Our services include timely annual return submissions, profits tax return preparation, audit coordination, and accurate tax computation. We also advise on MPF obligations, corporate compliance, and strategies to maximize tax incentives. Contact us today for a free consultation!
FAQs: Annual Returns vs Profits Tax Returns
1. How are Annual Returns different from Profits Tax Returns?
- Annual Return (Form NAR1): A yearly update submitted to the Companies Registry, covering company details such as directors, shareholders, registered address, and share capital—does not include financial data.
- Profits Tax Return (Form BIR51/52/54): Filed with the Inland Revenue Department, detailing the company’s financial performance, audited accounts, and tax computation to determine payable profits tax.
2. Why must companies submit both Annual and Profits Tax Returns?
- Two different government bodies handle separate responsibilities:
- Corporate transparency: The Companies Registry uses the Annual Return to maintain accurate public records.
- Tax compliance: The IRD uses the Profits Tax Return to assess tax liability.
- Failing to submit either can result in penalties or legal action from the respective authority.
3. Which filing is more expensive?
- Annual Return: Government fee of HK$105 if filed on time, with late penalties ranging from HK$870 to HK$3,480.
- Profits Tax Return: No government filing fee, but professional service fees and taxes assessed by the IRD can make it costlier overall.
4. What are the current profits tax rates in Hong Kong?
- Corporations: 8.25% on the first HK$2 million of profits, 16.5% on profits above HK$2 million.
- Unincorporated businesses (e.g., sole proprietorships, partnerships): Flat rate of 15%.
5. Who is eligible for audit exemptions in Profits Tax Returns?
- Dormant companies or qualifying Hong Kong branches may submit unaudited management accounts with IRD approval, but an Annual Return must still be filed.
6. What happens if I miss the filing deadlines?
- Annual Return: Escalating fines up to HK$3,480; repeated non-compliance may lead to company strike-off.
- Profits Tax Return: Fixed fines, additional tax up to three times the underpaid amount, or prosecution with fines up to HK$50,000 and imprisonment in severe cases.
7. Can I file both returns online?
- Annual Return: Yes, via the Companies Registry’s e-Registry portal.
- Profits Tax Return: Yes, electronic filing via the IRD eTAX system is mandatory from 2025/26 onward.
