Understanding Tax Return Hong Kong

Understanding Tax Return Hong Kong

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Taxation

Handling tax issues and stamp duty bills tends to be a tedious process. This article provides crucial instructions on the process of tax refunds stamp duty concerns like the loss or the non-receipt of a refund cheque, all necessary steps, and requirements. Whether you pay taxes or are involved in stamp duty issues, this article will guide you with useful information for dealing with these financial processes properly.

Refund of Tax

The tax that has been overpaid by you will be refunded to you by way of a refund cheque. Ordinary mail is used to send this cheque to your last known postal address. To avoid delays, kindly inform the Inland Revenue Department of a change in your home address as soon as possible.

The refund cheque must be deposited to your bank within 6 months from the issue date of the cheque. Balances, if unclaimed, will be used to pay off any tax you owe.

Loss / Non-receipt of Refund Cheques

You should write an application for a replacement cheque indicating your full name, file number, refund number or the related year of assessment and contact phone number.

You need to drop the application to the Refund Section at 3/F, Inland Revenue Centre, 5 Concorde Road, Kai Tak, Kowloon, Hong Kong. Mail that is not paid in full will not be returned. Please ensure you paid sufficient postage. In the Refund Section, the lost cheque will be spontaneously stopped and a fresh one will be issued. This usually takes 4 weeks. As for enquiries, go to the Refund Section at 2594 3126.

Name Change by the Payee on the Refund Cheque

The payee’s name is different on the cheque and identity documents

If it is an application for a refund, you can send it in the form of a written application to the Refund Section at 3/F, Inland Revenue Centre, 5 Concorde Road, Kai Tak, Kowloon, Hong Kong, along with the original cheque as well as the copy of your identification document (e.g. Hong Kong Identity Card or passport). Mail addressed to an undeliverable zip code will be returned. Please pay sufficient postage.

You may visit the Refund Section at 3/F, Inland Revenue Centre, 5 Concorde Road, Kai Tak, Kowloon, Hong Kong with your cheque and identity document as well.

Refund Section Office Hours: Monday to Friday from 8:15 a.m. to 12:30 p.m. and 1:30 p.m. to 5:30 p.m.

Request to Modify Payee’s Name on the Cheque to a Third Party’s Name

To safeguard the rights of the taxpayers and promote the prevention of the abuse, IRD usually do not accept requests of third party’s name change on the refund cheque of the payee.

Applications for special consideration should be accompanied by the following documents :

  • The initial refund check
  • Photocopy of the taxpayer’s identification document
  • Authorization letter from the taxpayer, if necessary
  • A properly filled and signed indemnity letter from the new recipient
  • Duplicate copies of pertinent legal documents accompanying the application

Refund of Stamp Duty

Refund for a stamp used on or a stamp certificate issued for an executed instrument may be permitted if: 

  • If the instrument is later discovered to be entirely void from inception or unsuitable for its intended purpose,
  • or if the stamp holds a higher value than required or is mistakenly applied to an instrument not liable for stamp duty.

An application for refund must be submitted within the 2 year timeframe after issuance of the instrument and form IRSD25 should be accompanied. To request the cancellation of a regular stamp case, the instrument on which the stamp is affixed should accompany the application.

Alongside the above conditions, if the sale of residential property is cancelled including factors other than the resale or disposal of the property by the purchaser, stamp duty charge may be avoided. The stamp duty charged on the same agreement might be refunded by the Collector of Stamp Revenue within 2 years after the agreement is terminated by the completion of Form IRSD125.

Adjudication

Upon payment of a $50 adjudication fee, any person can ask the Collector of Stamp Revenue (the Collector) to give an opinion on whether a stamped instrument is exempt from stamp duty and the amount of duty payable.

However, the adjudication fee is not required for a document that is particularly covered by the following parts of the Stamp Duty Ordinance (Cap. 117).

  • Section 24(2): Pertaining to conveyance or contract notes in consideration of debt.
  • Section 27(3) or 29F(2): Regarding instruments operating as gifts.
  • Section 29H(3) or 45(3): Concerning instruments qualifying for intra-group relief.
  • Section 44(3): Addressing instruments effecting a gift to an exempted institution.
  • Note 4 to head 1(1) and Note 3 to head 2(3) in the First Schedule: Specifically, referencing the foreclosure order.

The application for adjudication must be made at the Stamp Office Counter with the original instrument and required supporting papers. Electronic submission is not applicable. Adjudication of agreements or assignments of landed properties is regulated by the following link. 

Stamping Procedures and IRSD120 Explanatory Notes on “Stamping of Agreements and Assignments”

Appeal Against Stamp Duty Assessment

Any person who is not satisfied with the judgment the Collector has passed may appeal to the District The appeal should be applied directly to the court registrar within one month of the date the assessment was carried out. The proceeding stamp duty, the payment of which has to be made to file the appeal, unless a Collector agrees to postpone the payment of the whole or partial stamp duty in which case the amount that has not been postponed shall be paid or the court orders otherwise.

Application for deferring the payment of duty assessed for the appellant has to be written by the person and submitted to the court within 14 days after the date of assessment. In the application, the appellant should demonstrate his purpose to lodge an appeal and provide sufficient securities (normally in the form of a bank guarantee) as evidence that the request has been fulfilled.

If a party fails to file an appeal within the first month due to any illness or absence from Hong Kong that they cannot control or for other reasonable grounds, the Court may extend the period.

The court shall make a ruling after an appeal process. It will determine whether a stamp duty should be levied at all and if there is, the amount of stamp duty to be paid. Any stamp duty paid more than and over will guarantee a refund.

Appeal Procedures Notes (IRSD98)

How Can FastLane Help You?

If you are considering applying for a tax return in Hong Kong, getting assistance from an experienced financial service will be the best place to start. 

At  Fastlane, our team of experts is ready to help you with personalized consultation and solutions for your tax obligations. Contact us now to learn more about how our services can support you to meet your financial objectives.  

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