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Common problems in salaries tax of registered Hong Kong companies


We all know that after the successful registration of Hong Kong companies, account making and tax declaration is also an essential management link, and account making and tax declaration are also important conditions for maintaining the normal operation of Hong Kong companies. Although Hong Kong pursues the policy of "low tax rate and encouraging business operation", its tax management is very strict. Hong Kong company salaries tax is one of the most important taxes in Hong Kong. The basic meaning of salaries tax is that salaries tax is the income tax in the direct tax, which is the tax paid by the taxpayer for the income earned by working in Hong Kong.

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Objects of payment of salaries tax in Hong Kong

Under the Inland Revenue Ordinance, salaries tax is payable on most of the income earned in Hong Kong as a result of holding office, employment or receiving pension. The income referred to in the Ordinance must be generated in or from Hong Kong. As a result, employment contracts have been signed with Hong Kong companies or companies operating in Hong Kong, and the main place of work is in Hong Kong. Salaries tax is required for all salaries earned.

What is the income of salaries tax applicable to Hong Kong companies

Income subject to "salaries tax" includes: Director's remuneration, salary, commission, tip, bonus and extra reward, employee welfare, pension and other income received by retirees, which are included in the taxable income.

In some special circumstances, all the duties of an employee are performed outside Hong Kong; or in an employment contract signed with an overseas or mainland company, the employee works in Hong Kong for part of the year. In principle, the income of the employee shall be paid salaries tax in Hong Kong according to the proportion of the time he works in Hong Kong.

Time for filing salaries tax in Hong Kong

The payment time of salaries tax in Hong Kong is from April 1 to March 31 of the following year. Employees are required to report all their income to the tax bureau during this period. Failure to pay salaries tax on time will have certain impact. After the end of the tax year on March 31 of each year, the tax bureau will issue form ir56b to each company, which is used to report all the income of each employee of the company from the company in the previous tax year. The company needs to fill in the form and send it back to the Tax Bureau within one month.

Hong Kong companies do not need to pay salaries tax if they do not have a physical office

As far as Hong Kong salaries tax is concerned, both employers and employees have reporting obligations. Many investors often neglect salaries tax because they have no real office in Hong Kong after registering a Hong Kong company. The income assessment of salaries tax can be divided into two categories: "Hong Kong Employment" and "non Hong Kong Employment". If an enterprise employee is engaged in "Hong Kong Employment", the employer needs to report all the information truthfully. If an enterprise employee is engaged in "non Hong Kong Employment", the employer still needs to report the information truthfully, because the tax bureau will report the number of days the employee stays in Hong Kong in each tax year To assess the tax.

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