Hong Kong IRD introduces new Profits Tax Return filing requirements

Hong Kong’s Inland Revenue Department (IRD) announced that, starting from this year, all corporations and businesses – regardless of the amount of their gross income and the mode of return filing – are required to submit their profits tax returns (PTRs) together with all supporting documents, including financial statements and profits tax computations.

Mingson Chi, Client Accounting Manager at Sovereign Trust (HK), said: “From now on, financial statements and profits tax computations are required for PTR submission, except for those companies that have been declared dormant by the Companies Registry.”

In addition, all relevant supplementary forms and any other forms that are required to be submitted with the returns should be e-filed under eTAX electronic services. Any taxpayer that does not choose to e-file the return is instead required to print and sign a paper Control List, which must be submitted together with the return and supporting documents in paper form.

The IRD said it had issued about 220,000 profits tax returns, 120,000 property tax returns and 310,000 employer’s returns for the year of assessment 2022-23 on 3 April. A further 2.4 million tax returns for individual taxpayers was then issued on 2 May.

Taxpayers and employers are generally required to file their returns within one month from the date of issue of the relevant returns. Where fiscal representatives have been appointed, the relevant deadlines for filing returns are set out in the Block Extension Letter on the department’s website.

The IRD has gradually enhanced the functions of electronic tax filing to promote tax digitalisation and to enhance the efficiency, reliability and accuracy of return filing. In particular, enhanced e-filing services have been introduced for profits tax returns with the following new features and filing requirements:

• All corporations and businesses can e-file profits tax returns under eTAX for the year of assessment 2022-23. They only need to fill in simplified e-returns online, upload completed required forms and the supporting documents prepared in inline eXtensible Business Reporting Language (iXBRL) format, e-sign and submit the returns through eTAX.
• Semi-electronic filing mode is also available under eTAX. A taxpayer can upload the completed required forms and the supporting documents prepared in iXBRL format through eTAX, print a simplified tax return generated by eTAX for signature and submission in paper form.
• For full electronic filing or semi-electronic filing of profits tax returns, the taxpayer is required to submit the financial statements and profits tax computations in iXBRL format. iXBRL Data Preparation Tools are available for download on the IRD website (www.ird.gov.hk/ixbrl) free of charge.