In this course · 4 of 6
Course 1
Know your record duties
6 lessons · 7 min
- 1Bookkeeping vs Accounting in Hong Kong: What Is the Difference?
- 2Is a Hong Kong company legally required to keep accounting records?
- 3What Records Must a Hong Kong Company Keep? Section 373 Checklist
- 4What Does Section 51C Require from a Hong Kong Business? (IRD Records)
- 5Does Business Registration Cover Bookkeeping in Hong Kong?
- 6Penalties for Not Keeping Accounting Records in Hong Kong
The short answer
Section 51C of the Inland Revenue Ordinance (Cap. 112) requires every business in Hong Kong to keep enough records, in English or Chinese, to work out assessable profits, and to keep them for at least 7 years. Failing to do so without reasonable excuse can bring a fine of up to HK$100,000.
Section 51C applies to every business in Hong Kong, whether it is a company, a partnership or a sole proprietorship. You must keep sufficient records of income and expenditure so that assessable profits can be readily ascertained.
The IRD lists the kinds of records it expects:
- books of account showing receipts and payments, or income and expenditure;
- vouchers, bank statements, invoices and receipts;
- records of business assets and liabilities;
- if you deal in goods, records of what you bought and sold, who the suppliers and customers were, and enough detail to check quantities and values, plus year-end stock statements and the stocktake records behind them;
- if you provide services, records of the services in enough detail to verify the entries.
| Item | Rule |
|---|---|
| Language | English or Chinese |
| Retention | at least 7 years after the completion of the transactions |
| Penalty | a fine of up to HK$100,000 where there is no reasonable excuse |
The IRD's brief guide notes that the duty does not apply to a corporation that has been dissolved.
Legal basis and sources
The law
- Inland Revenue Ordinance (Cap. 112), s.51C
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
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