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Hong Kong is one of the freest economies in the world. To register a Hong Kong company has always been an important step for domestic enterprises to invest and link to the international market. After the successful registration of Hong Kong company, tax planning has always been an important part of the operation and maintenance of Hong Kong company. If the company fails to file tax returns in time, it will have an important impact on Hong Kong company.
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According to the latest news from the Hong Kong Tax Bureau, on April 1, the Hong Kong tax bureau sent out about 190000 profit tax returns, 130000 property tax returns and 310000 employer tax returns for 2018-19. Some 2.68 million individual returns will be issued on May 2, so April and may are the peak periods for Hong Kong corporate tax returns.
Unexpected accounting and tax declaration of Hong Kong company
The first time for the newly established Hong Kong company to file tax returns is 18 months from the date of establishment. The first time for the newly established Hong Kong company to receive the tax returns issued by the tax bureau, the tax returns must be completed within 3 months after receiving the tax returns.
The annual tax returns of non newly established Hong Kong companies shall be issued on April 1 of each year. After receiving the profits tax returns, the tax returns shall be completed within one month.
No misinterpretation of zero return of Hong Kong company
There are three main ways for Hong Kong companies to file tax returns, including zero filing, total accounting filing and offshore exemption. If the company does not operate in Hong Kong and has no bank account of the company in a financial year, it can apply to the government for zero filing and exemption from auditing. Generally speaking, zero declaration is only suitable for companies that have never been in operation or have terminated their business and are ready to close after the establishment of the company.
However, there are many misconceptions about the zero declaration of Hong Kong companies. For example, some people think that the offshore operation of Hong Kong companies can make zero declaration. In fact, whether they operate in Hong Kong or not, they need to submit tax declaration materials to the Hong Kong Tax Bureau. Some people think that it's not necessary to pay tax if we don't make zero declaration. If Hong Kong companies meet the conditions of zero declaration, it's better to apply for zero declaration. If they don't meet the conditions, they should check and report tax normally.
What are the preparations for tax declaration of Hong Kong companies
For newly registered Hong Kong companies, the following preparations shall be made in advance for the first tax declaration:
① Opening corporate bank account: only opening a bank account can normal audit and tax declaration. Under the influence of CRS environment, Hong Kong bank account opening audit is very strict, and Hong Kong bank account opening needs to be prepared in advance.
② Seal of invoice: generally, the company has the seal of invoice when registering;
② Billing system of handling company: This is the difference between the free billing system and the paid billing system. The free billing system needs to get the invoice from the tax bureau.
④ Data processing: Hong Kong companies make accounts and tax returns once a year, but Hong Kong companies should start to prepare accounting data when there are business operations. There are a lot of data to be submitted when making account and tax declaration, including bank monthly statement and water bill, sales bill, cost bill, expense bill, etc. In addition, the accounting and auditing personnel platform should do a good job in the classification and sorting of bills, so as to smoothly carry out the work of tax declaration.
There will be a peak period for Hong Kong companies to file their accounts and tax returns. All Hong Kong companies should be fully prepared to avoid overdue tax returns. Hong Kong companies are expected to incur a certain amount of fines in their tax returns, and they still need to continue to make tax returns.
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