Hong Kong Company Formation- Company Formation, offshore company formation, offshore company, limited company

Hong Kong Company Formation: Collection of Taxes

Hong Kong:

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Collection of Taxes

A notice of assessment served to a taxpayer stipulates the amount of tax payable and the due date. A taxpayer should refer to the accompanying payment voucher and settle the amount payable on time by the following means:

(1) Payment by electronic means

Payment can, subject to the personal transaction limit of taxpayers, be made by phone, by bank automated teller machines (ATM), or via the internet. The correct Shroff Account Number should be used when making payment.

The Inland Revenue Department’s PPS merchant code for payment by phone is 10. Taxpayers should dial 18011 for bill registration and 18031 for payment.

Payment by ATM card can be made at any HSBC/Hang Seng Bank ATM with the “Bill Payment” sign, or at any JETCO ATMs with the “Jet Payment” Logo.

To make payment via the internet, taxpayers can visit our website www.ird.gov.hk, select the preferred language, click on “Payment” under the “Tax Information – Others” menu, “Payment Methods” and then “Payment via Internet”, and follow the instructions/links under the heading.

(2) Payment by post

Any payment by post should be by cheque and not in cash, should allow for sufficient mailing time, and should be accompanied by the payment voucher. Post-dated cheques will not be accepted.

The cheque should be crossed, and made payable to “The Government of the Hong Kong Special Administrative Region” or “The Government of the HKSAR” and sent to the Commissioner of Inland Revenue, P O Box 28282, Gloucester Road Post Office, Hong Kong. The Shroff Account Number should be written on the back of the cheque.

(3) Payment in person

Payment in person by cheque, cash or EPS together with the payment voucher can be made at any post offices (except mobile post offices).

Electronic Payment

To pay tax by electronic means, taxpayers should enter the “Shroff Account Number for electronic payments” printed on the payment voucher or payment slip and observe the daily transaction limit and payment instructions of the relevant banks.

If tax is not fully paid by the specified due date, the total unpaid tax including the second installment, if any, will be deemed to be in default and immediately recoverable. A surcharge of 5% will be added to the unpaid amount. The Commissioner is empowered to take recovery actions which include the institution of civil action in the District Court, or the issue of a notice to a third party who owes or is about to pay money to the defaulting taxpayer requiring him to pay such moneys not exceeding the amount of tax in default to the Department. A defaulter will be liable to the following costs and interest in addition to the outstanding tax due upon entry of judgment:

  1. Court fee ($630)
  2. Fixed costs ($300)
  3. Interest on the judgment sum from the date of commencement of proceedings to the date of full settlement. The judgment interest rate is available for reference on the IRD homepage on the internet. The rate as at 1 April 2009 is 8%.

If outstanding sum continues to be in default for a period of 6 months after the due date, a further 10% surcharge may be added to the total unpaid amount (including the 5% surcharge).

To build up funds for tax payment, taxpayers are encouraged to join our Electronic Tax Reserve Certificates Scheme. They can purchase Tax Reserve Certificates (TRCs) monthly by bank autopay or at any time by telephone, automated teller machine, via the Internet, by post or in person at the post office. The Scheme offers “Auto Tax Payment Service” which ensures on-time tax payment. The TRCs held in the account will be automatically redeemed, on a First-In-First-Out basis, for payment of the holder’s tax.