Profits Tax Return – Corporations (BIR51) is a profit tax return form issued by the Inland Revenue Department (IRD) of Hong Kong. Particularly, BIR51 is critical in the tax system of Hong Kong that requires businesses to disclose their income and pay the appropriate amount of tax. This form is usually issued to the taxpayers annually and must be filled and submitted to the IRD by a stated deadline.
Content Outline
Key Takeaways for BIR51
Timely Submission Prevents Penalties
Filing BIR51 on time is crucial. Missing the deadline can lead to penalties, so ensure your company submit the form promptly each year.
Accurate Information Maximizes Tax Relief
Accurately completing BIR51 allows you to claim all eligible deductions and allowances, which can significantly reduce your tax bill.
Early Preparation Simplifies Filing
Gathering your income and deduction details early can make completing BIR51 smoother and help you avoid last-minute stress.
Who Needs To Submit BIR51?
BIR51 is normally submitted by the followings:
- Corporations:
- All corporations operating in Hong Kong, regardless of their size or industry, are generally required to file BIR51.
- This includes companies registered in Hong Kong as well as foreign companies conducting business within the territory.
- Small Corporations and Dormant Businesses:
- While small corporations and dormant businesses may have some exemptions or reduced requirements, they still need to file BIR51.
- However, they may not be required to provide audited financial statements or other supporting documents.
- Non-Resident Persons:
- Non-resident persons who are chargeable to profits tax in Hong Kong due to their business activities or investments are also required to file BIR51.
Key Sections Of BIR51
When you receive BIR51, the form will contain several key sections such as:
- Company Details: Name of the corporation or business, Business registration number, address, contact information
- Income Information: You will be required to declare your company source of income including Gross income from business operations, income from investments and other sources of income
- Tax Deductable Item: The form enables you to claim tax deduction (e.g., operating expenses, salaries, depreciation)
- Tax Calculation: The form will help you calculate the amount of total tax payable using your income and deductions.
Why Is BIR51 Important?
There are many reasons why it is important to fill BIR51 on time because it will prove that the company has complied with the legal requirement and obligations regarding taxes. Failing to fill the form or giving the wrong information can lead to the penalties or legal consequences. Accurate submission of BIR51 allows you to request other eligible tax deductions that can be claimed on a particular type of income.
When Should BIR51 Be Submitted?
The IRD generally releases the BIR51 forms on the first working day of April each year, with the deadline for submission in early June. To be safe, it is recommended that this deadline must be followed so as not to be penalized for late submission.
BIR51 is critical in the tax system of Hong Kong that requires corporations and businesses to disclose their income and pay the appropriate amount of tax. Understanding what BIR51 is and how to complete it appropriately with a view of observing the laws in Hong Kong and possibly minimize the tax that is payable by making valid deductions and allowances to the tax payable.