Starting your own business is exciting! But in Hong Kong, apart from focusing on business development, compliant financial management is equally important. For many first-time business owners, the first year of "accounting, auditing and tax filing" is often the biggest headache.
Once you miss the IRD's filing deadline, you will not only face high penalties, but may even affect your company's good record. This article is written by professional Hong KongSecretary CompanyWe've organized a complete timeline and list of essential documents for your first year of tax preparation to help you ease your tax challenges.
First year tax return and audit schedule for Hong Kong companies
The Hong Kong Inland Revenue Department (IRD) offers a relatively generous lead time for new limited liability companies, but that doesn't mean you can forget about your finances. Here are some key points to keep in mind in your first year:
Within 18 months from the date of incorporation: The Inland Revenue Department (IRD) will issue the first Profits Tax Return (PTR) to your company.
Within 1 to 3 months of receipt of tax return: This is the due date for filing your first tax return (depending on the financial year end you choose). You must submit it together with an "Audit Report" (Audit Report) signed by a Certified Public Accountant (CPA) in Hong Kong.
During daily operation: Even if there is still a long time to go before you file your tax return, you should keep all your business-related receipts and monthly bank statements from day one of your company's existence.
Checklist of Documents Required for Accounting and Auditing
In order for the accountant to complete the audit report for you, you need to prepare the following complete information in advance. Monthly filing is recommended and can significantly save time in organizing at the end of the year:
Bank documents: Monthly statements for all company bank accounts.
Sales Documents: Issuing invoices, receipts and related business contracts to customers.
Procurement and Expenditure Documentation: Vendor invoices, rent receipts, utility bills, employee payroll records and Mandatory Provident Fund (MPF) contribution records.
Company statutory documents: Business Registration Certificate (BR), Certificate of Incorporation (CI), latest Annual Return (NAR1) and Memorandum and Articles of Association (M&A).
Other special documents: If there is any purchase of fixed assets, investment or loan involved, relevant contracts and certificates must be provided.
Why do you need the help of a professional team?
Dealing with cumbersome accounting and tax regulations can often consume a lot of a founder's energy, and M&N is committed to providing one-stop corporate services to our demanding clients. We not only help our clients to smoothlyOpen CompanyIn addition, it extends its services to all aspects of business operations.
If you have a need to expand internationally, we can plan for you!Open Overseas Company及Open an offshore companyof the best solutions. In our daily operation, we provide professionalAccounting & TaxationThe service ensures that your financial statements are in full compliance with Hong Kong regulations, eliminating the need to worry about the future.
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Frequently Asked Questions (FAQ)
If your company has "no" business transactions (including bank transfers) during the financial year, you can apply for "Dormant" status and file a zero return with the Inland Revenue Department. However, as long as there is a single transaction, an audit is required under the Hong Kong Companies Ordinance.
You can organize your daily running accounts yourself, but the Audit Report submitted to the IRD must be audited and signed by a Hong Kong licensed Certified Public Accountant (CPA), which is a statutory requirement and cannot be done by in-house staff.
Most Hong Kong companies choose 31 March or 31 December as the settlement date because these two dates usually allow a longer grace period for deferred filing by the Inland Revenue Department (IRD), which provides more flexibility in the deployment of funds.
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