In the blink of an eye, it’s the beginning of a year again, which means you could start over to think about how to deploy your business plans, and at the same time, don't miss any local compliance duties that might affect your company’s operation, especially if you are a foreign entrepreneur.

**Commencing from the year of 2018/19 (i.e. on or after 1 April 2018), the HK profits tax rate is adjusted to 8.25% according to the two-tier profits tax system. The tax rate for the first HK$2 million of profits is 8.25%, and 16.5% will be applied for profits exceeding that amount. 

Let’s take a closer look at some of the basic TAX FILING & PLANNING areas that need your attention if you have a business in HK :


Get Familiar with the Compliance

There are 3 types of annual tax returns the IRD will issue to those entrepreneurs doing business in HK for more than 1 year since the date of incorporation: Employer’s Return, Profits Tax Return and Individual Tax Return. Different tax return has different kinds of compliance. Taking Employer’s Return as an example: there are several types of document you need to file for your employees compulsorily (e.g. completed BIR56A and IR56B - the Employers’ Return of Remuneration and Pensions Forms; completed IR6036B that is about remuneration paid to persons other than employees; etc.), for which you might feel dizzy when seeing all these requirements and a little nervous that some of them could be filled out incorrectly, and your tax return will get rejected at the worst case.

Although HK tax regime is rather simple, its documentation filing requirements are relatively rigorous due to the well-developed regulatory system. Therefore, it might be easier if all your tax filing duties are managed by a professional and experienced agency in HK with a good reputation.


Accurateness & Effectiveness

If your accounts and audit reports are not built properly from the beginning, it is not easy to further execute an effective tax efficiency plan in the financial reports when you start making good profits at a more mature stage. Some people might think they can just prepare some simple bookkeeping records by themselves for their businesses since they don’t have many resources - that’s a misconception - provided that every HK business is required to submit audit reports to the Government every year in general, if the full set of accounts including Profit & Loss Accounts, Balance Sheet, General Ledger, Trial Balance, etc. is not available for the auditors to assess, they just can’t finish the auditing procedure, and nearly unable to give any advice on tax compliance strategy.

In fact, getting an accounting service provider to help is not as hard (and expensive) as you think, check out our rate here to have an idea. After your accounts and audit reports are well arranged at an early stage, you will be able to review the whole financial picture of your business in advance and receive the tax computation information for fixing your financial strategies in the most tax-efficient manner.


Tax Exemption for Offshore Company?

As one of the most flourishing markets in the world, HK has adopted a lot of overseas investors. Some of them might be running an offshore business while the operation does not really take place in HK. You may wonder how your company can be claimed as an ‘offshore business’ by the IRD and if it will be able to enjoy tax exemption. Certain criteria need to be met to qualify for such definition, e.g. the terms of the purchase and sales contracts are completely negotiated and conducted with suppliers and customers outside HK; the service is performed in a place wholly outside HK; etc. Please click here for details of qualifying for ‘offshore claims’ submission, while one important key is to prove the profits are not liable to HK Profits Tax by proper planning at the initial stage.  

As seen, there are heaps of tax compliance issues that could be affecting your final tax reporting and optimisation result. Although different accounting & tax advisors have their own specialties, how do you know which one can be trusted? If you are want to start or execute the whole arrangement properly, send us an email at or call +852 2159 9666 today.

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Have you ever thought about how a Company Signage could enhance your business image? Or did you know directory signage could help facilitate your official business applications to the government authorities? After reading this blog, you may just be surprised at how this simple tool does great things for your business!


Strengthen Company Image

Company signage sets at the entrance of a premier business centre or building in HK could be one of the keys to outrun your competitor. Imagine if you want to acquire a service, when you arrive the building there is nowhere showing where the office is, you will probably turn away, and a business opportunity is slipped away.

Or if you are about to engage in business with another start-up company, they gave you an address so you went up for a visit and tried to look into the directory signage, but the company name is nowhere to be seen. Doesn't it look undependable? In the past years we have seen many visitors stand in front of the directory signage board for a while and they left without a word. Not only does company signage present your services and products, but also helps customers to decide what you are providing is for them or not, especially if you are a foreign entrepreneur and people are new to your name. It is also a guiding tool for your business to people.


Leverage Practical Functionality

When submitting applications to government departments or financial institutions, they always require a registered corporate correspondence address that proves your business presence in HK. Thus, your company directory signage will serve as a good proof in such applications like business license application, HK working visa application, bank account opening, etc.

A survey from FedEx once found during parcels or products delivery, people may get confused or even returned from the location when the company signage is omitted at the entrance, and eventually it cannot be sure whether the products are delivered to the right address. Therefore the reason why people registered for company signage is not for maintaining their company image only but also trying to serve the basic and practical purposes such as ensuring they can send out as well as receive their business materials accurately and efficiently. A proper company signage at the entrance can easily project a good presence to represent the company and people are then able to locate it quickly.

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