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Differences between Hong Kong companies and mainland companies in accounting and tax declaration


Hong Kong is an international metropolis with highly developed information. It is the most free trade port in the world. In addition to its good infrastructure and sound legal system, Hong Kong has attracted many investors to register Hong Kong companies. In the aspect of tax declaration, mainland companies adopt the principle of double entry bookkeeping, and Hong Kong companies also generally adopt this principle. What are the differences between mainland companies and Hong Kong companies in accounting, tax reporting and auditing?

Hong Kong company tax declaration

1. Accounting and tax declaration process

The general process of accounting and tax declaration of Hong Kong company:

① The Hong Kong company provides the financial documents, makes the account agent to carry on the appraisal quotation, the Hong Kong company pays;

② Acting bookkeeping company shall conduct bookkeeping according to the financial documents of Hong Kong company; after the bookkeeping is completed, Hong Kong certified public accountant shall audit;

③ After the audit of the Hong Kong company is completed, the shareholders shall sign the audit report, and the accountant shall present the signed audit report to the government for tax declaration;

④ The auditor returns the relevant documents to the Hong Kong company (client) for retention.

General process of account making of mainland company:

① Review all kinds of original vouchers, and prepare accounting vouchers after verification;

② Register various sub ledgers according to the bookkeeping voucher;

③ At the end of the month, it shall be used as the accounting voucher for accrual, amortization and carry forward,

④ Closing and reconciliation;

⑤ Prepare accurate and complete accounting statements;

⑥ Bind the accounting vouchers into volumes.

Auditing of Hong Kong companies is also called auditing of Hong Kong companies. That is to say, the Hong Kong Licensed accountant shall verify and approve the financial accounts of the Hong Kong company. According to the process comparison, compared with the audit process of Hong Kong company, the audit process of work accounting in mainland China is indeed more complicated.

2. Different tax reporting periods

Hong Kong companies have a long tax filing cycle. Each tax filing comes 18 months after the establishment of the company, and then is an annual report.. The Tax Bureau requires a company that has already started business to submit an audited accounting report to explain its business status. Tax declaration does not mean tax payment. If there is any profit, and the profit comes from Hong Kong, tax payment is required. In other words, profits not generated in Hong Kong can be exempted from taxation.

According to the relevant regulations of the mainland, if the consumption tax payer takes one month or one quarter as one tax period, he / she shall report and pay within 15 days from the expiration date. Mainland companies have to file tax returns every month, pay income tax if they have profits, as well as value-added tax and business tax.

In addition to the different accounting process and tax reporting cycle, Hong Kong companies and mainland companies also have very different information distribution requirements.

In addition, in the process of Hong Kong registration and tax declaration, it should be noted that if Hong Kong companies need to make tax declaration within the specified time limit, there will be a penalty. In order to avoid overdue, it is suggested that the company should start to prepare account preparation and audit before receiving the tax return.

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