Hong Kong is famous for easy and straight forward rule and tax policy. So Hong Kong can attract investment from worldwide entrepreneurs and startups. No matter how easy or simple regulations, you might miss or confuse with the mandatory submission. Centre O is going to go-thru 3 forms: Annual Returns NAR1, Employer’s Returns & Profit Tax Returns. We hope you can understand the whole progress in advance. Instead of learning via paying penalties.
Deliver to WHOM?
All business owners have to communicate with Inland Revenue Department (IRD) and Company Registry (CR)annually. CR is responsible for all Hong Kong limited company which is established under the Company Ordinances. While IRD is responsible for the Business Registration including tradename of sole proprietorship and partnership.
What forms you need to Deliver?
NAR1
You have to deliver annual return form (NAR1) to Company Registry . NAR1 contains the particulars of the company such as the address of the registered office, shareholders, directors, company secretary, etc. as at the made up date of the return.
Employer’s Return
Employer’s Return (ER) contains the amount your company have been paid for your employees. So, ER needs to deliver IRD. Then IRD can assess the tax payable for your employees.
Profits Tax Return
Profits Tax Return should deliver to IRD. Then IRD will access your company’s tax payable according to your filing.
Who needs to deliver?
NAR1
If your limited company is established under the Company Ordinances, then you need to deliver the NAR1 annually. If you own a sole proprietorship or partnership, then NAR1 is not your issue.
Employer’s Return
All type of business structure, you have to submit your Employer’s Return. If you are owner of a limited Company, then you have to declare how much the company have been paid for directors, full time and part time employees. Even though the director doesn’t have any renumeration.
Profits Tax Return
All type of business structure, you have to deliver Profits Tax Return for your company. If you are running gain, you must deliver every year; Unfortunately, you ran loss, then IRD will not send Profits Tax Return to you in the coming 2 years. However, if you make profit, you must inform IRD.
When to deliver?
NAR1
For the limited companies, you have to file your NAR1 within 42 days on the company anniversary date to CR. For example, you incorporation date is 1 Jan 2023, then you have to file your NAR1 on or before 12 Feb 2024.
Employer’s Return
IRD schedules to deliver Employer’s Return in early April annually. You have to fill and submit to IRD within 1 month. IRD doesn’t accept any deadline extension. So, you better prepare your data accurately monthly. As you need to report the salary have paid from 1st April previous year till 31 Mar current year. Then you can fill up quick and accurately without headache.
Profits Tax Return
For the new startup, IRD will send Profits Tax Return after 18 months of your incorporation. If you are running gain, then every April you will receive a green envelope. And you have to file the Profits Tax Return within 1 month. However, for limited companies and partnerships still can apply for extension for 8-11 month via your tax representative.
For the sole proprietorship, your envelope schedules to come in May every year. Then you can file the Profit Tax Return with your Salary Tax Return together.
Starting from 2023, all business structure have to file your Profit Tax Return together with a management account statement and signed by an auditor or directors.
For further information, please contact us.
You may want to know: What are Hong Kong Limited Company Annual Obligations