There are four main taxes in Hong Kong, named profit tax (corporate tax), salaries tax (individual tax), property tax and stamp duty.
You are at least required:
- 1.Properly complete all tax return;
- 2.File tax return on time;
- 3.Settle all tax labilities on time
Etc...
To ease your compliance burden, we will act as your tax representative. (For details of quotation, please refer to our website)
Every Hong Kong limited company will receive its Profits Tax Return from Inland Revenue Department ("IRD") in around eighteenth month from its incorporation.
No matter you business is carried out in Hong Kong or outside Hong Kong, you are required to submit audited accounts with the Profits Tax Return timely and properly.
Therefore, you are encouraged to have your company's accounting records much earlier than the Profits tax return to be issued as to allow some time to have the accounts audited by HK Certified Public Accountant.
To ease you compliance burden, we will act as your tax representative and auditor. (For details of quotation, please refer to our website).
AEOI is a new system that involves transference of financial information from Hong Kong to an overseas tax jurisdiction (or known as an “AEOI partner”) with which Hong Kong has entered into an AEOI agreement. The information relates only to the tax residents of the jurisdiction of the AEOI partner.
Up to the end of June 2016, Hong Kong have signed 35 comprehensive avoidance of double taxation agreements (“CDTAs”) and 7 tax information exchange agreements (“TIEAs”).
IRD will announce, by the end of 2016, the list of AEOI partners, i.e. the jurisdictions with which Hong Kong has entered into AEOI agreements, for exchange of information in 2018.
Step 1: All HK financial institution will identify on behalf of Hong Kong government, the financial accounts held by individuals or entities (reportable persons) liable to tax by reason of residence in the AEOI partner jurisdictions.
Method: The reporting financial institutions may ask account holders to complete self-certification forms for verification of their tax residency status. The self-certifications will be kept by the reporting financial institutions for a period of six years.
Step 2: The HK financial institution will collect and furnish to IRD information of the identified account holders (individual or entity) and the financial account information on an annual basis.
Step 3: IRD will then transfer the financial information to the tax administration of the AEOI partners of which the account holder is tax resident.
In general, it is determined by having regard to the person’s physical presence or stay in a place (i.e. whether over 183 days within a particular tax year).
In particular for a company: it is also determined by the place of incorporation or where the central management/ control of the company is located.
Each jurisdiction has its specific definition of tax residence. In OECD’s AEOI portal, you can find more information regarding the tax laws of different jurisdictions for defining tax residence. The website address is as follows:
Type 1: Hong Kong taxpayers who are not tax residents of any territory outside Hong Kong
Impact: Their information will not be reported to any non HK administration/ AEOI partners.
Type 2: Hong Kong taxpayers who are tax residents of any AEOI partners, their information will be automatically exchanged with jurisdictions/ relevant AEOI partners of residence of account holders on an annual basis.
It includes personal data and financial data.
For personal data: name, address jurisdiction of residence, taxpayer identification number (“TIN”), and the date and place of birth.
For financial data: account number, account balance/ value as at year end, gross amount of interests, dividends and sale proceeds of financial assets as appropriate for the particular year.
Nowadays, 1 out of 10 account opening application are rejected by HK banks in average. The operation of banks has become more complicated due to global sanctions and tax reform. Therefore, banks are compelled to fulfill higher international standards in maintaining relationships with potential clients. Contact us if you have similar difficulty.
One of a reason is an individual refuses to allow the bank to release his personal data for AEOI purpose, the bank will consider whether or not the account should be maintained.
Under the Amendment Ordinance in Hong Kong, those reporting financial institutions are required to apply the due diligence procedures to identify the tax residency of all account holders and controlling persons for the purpose of AEOI. Therefore an account holder is required to provide his tax residency to a reporting financial institution. For details about AEOI, you may visit our FAQ under taxation.
Financial institutions would be obliged to start collecting information for reportable accounts of account holders who are tax residents of an AEOI partner, in the calendar year following the approval by the Legislative Council of the inclusion of the AEOI partner as a reportable jurisdiction in the law. Financial institutions will then report the information to IRD in the next calendar year after its collection for onward transmission to relevant AEOI partners.
All below financial institutions who also a resident in Hong Kong or a branch of a non-resident located in Hong Kong:
- custodial institutions;
- depository institutions;
- investment entities;
- specified insurance companies;
Under the Companies Ordinance, every company must have a secretary. The sole director of a private company cannot be appointed as the secretary of the company. The secretary must be a Hong Kong resident or a body corporate having its registered office or place of business in Hong Kong.
We will act as company secretary and annual service fee will be charged. (For details of quotation, please refer to our website).
The Companies Ordinance ("CO") was introduced in 2006 and revised in 2014 with the aim of advancing the company law with the time and maintain Hong Kong's reputation as an international financial hub.
- There is a specific section in the new CO to provide a clear guidance to directors, the standard of director’s duty of care, skill and diligence.
- The rules on indemnification of directors against liabilities to third parties are now clarified in the new CO, etc….
The new CO requires that every private HK company must have at least one natural person acted as a director of the company as to enhance transparency and accountability of directors of HK Company. Therefore, you are allowed to appoint a corporate director if there is already a natural person acted as a director of your company.
Yes, director of a HK company can be a non-HK resident or non-HK corporate. However, secretary of your HK company must be a HK resident or a corporate with place of business in HK (such as CY CHAN CPA).
On top of the existing conditions: (i) ceased operation, (ii) no outstanding liabilities and (ii) agreed by all members, below are 3 additional conditions have been specified in the new CO:
- Your company does not currently participate in any legal proceedings;
- Your company has no immovable property located in Hong Kong;
- If your company is a holding company, all subsidiaries of your company has no immovable property located in Hong Kong;
Under new CO, if you are a director of a Hong Kong company, your personal data is more securely protected. The public can only access to your correspondence address instead of your residential address. In addition, your identification number is masked and only partial numbers is shown.
Beside paying annual fee to HK Government (e.g. Annual return and business registration fee), you are also required to pay account and auditing fees in compliance with HK statutory requirements. (For details of quotation, please refer to our website.)
According to HK Companies Ordinance, every HK Company is required to prepare books and records for their company on annual basis. In addition, the books and records should be audited by HK Certified Public Accountant (CPA) before present to owners in every annual general meeting. CY Chan Certified Public Accountant (Practising) is a qualified party to carry out account and audit for HK Company.
