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Hong Kong Company Formation: Obligations of Taxpayers (Salaries, Profits & Property Tax) under the Inland Revenue Ordinance

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Company Formation Hong Kong: Obligations of Taxpayers (Salaries, Profits & Property Tax) under the Inland Revenue Ordinance

Section 5(2)(c)

Where a corporation has been exempted from Property Tax and a change of ownership or of use takes place which might affect such exemption, the corporation must notify the Commissioner of Inland Revenue in writing within 30 days after the event.

Section 51(2)

Every person (whether an individual, a partnership or a corporation) who is chargeable to Salaries, Profits or Property Tax for any year of assessment and who has not received a Return Form is required to inform the Commissioner of Inland Revenue in writing that he is so chargeable within 4 months after the end of the basis period for the year of assessment concerned.

Section 51(6)

Any person who ceases to carry on a trade, profession or business, or ceases to hold an office or employment, or ceases to be the owner of any land or buildings or land and buildings, of which tax is chargeable; or ceases to have a source of income in respect of which he is personally assessed must inform the Commissioner of Inland Revenue in writing within 1 month of such cessation.

Section 51(7)

Any person chargeable to Salaries Tax, Profits Tax or Personal Assessment who is leaving Hong Kong for a period exceeding one month must notify the Commissioner of Inland Revenue in writing at least 1 month before he is due to leave. If he intends to return to Hong Kong, the approximate date of return must be given. This does not apply to persons who are required to leave frequently in the course of his employment, business or profession.

Section 51(8)

Any person chargeable to Salaries Tax, Profits Tax, Personal Assessment or Property Tax who changes his address must notify the Commissioner of Inland Revenue in writing within 1 month. The Inland Revenue Ordinance also provides that anything sent from the Inland Revenue Department is properly served if sent by post to a person’s last known address. In other words although a person failed to receive a notice from the Department, he is deemed to have received it if it was sent by post to his last known address. The Department usually sends all mail by ordinary post and it is important therefore that notification of change of address is promptly made.

Section 51C

Every person carrying on a trade, profession or business in Hong Kong must keep sufficient records of his income and expenditure (either in English or in Chinese) to enable his assessable profits to be readily ascertained. There are statutory requirements to record certain specified details of every business transaction. Business records must be retained for at least 7 years after the date of the transaction to which they relate. This does not apply to a corporation which has been dissolved.

Section 51D

Owners of properties must keep sufficient records of rent received, such as lease agreements and duplicates of rent receipts to enable their tax liability to be readily ascertained. Such records should be retained for a period of not less than 7 years.