In this course · 3 of 9
Course 3
Profits tax for online sellers
9 lessons · 9 min
- 1Is there VAT or sales tax on online sales in Hong Kong?
- 2What profits tax rates apply to an online store in Hong Kong?
- 3How and when does an online seller file profits tax returns?
- 4Can a new online store carry forward its trading losses?
- 5Does server location decide whether e-commerce profits are taxed in Hong Kong?
- 6What evidence does the IRD want for an offshore profits claim for an online store in Hong Kong?
- 7Can a Hong Kong trading company claim offshore profits if it buys in mainland China?
- 8What penalties apply if an online seller files an incorrect or late profits tax return?
- 9How can a Hong Kong company get a tax residency certificate for Amazon or other platforms?
The short answer
A Hong Kong business must file the profits tax return issued by the Inland Revenue Department (IRD) by the due date shown on it, normally one month after issue. Block Extension Schemes usually give agents and taxpayers longer. Companies file audited accounts with the return.
Once a business is registered and has started trading, the IRD issues a profits tax return, usually after a year of assessment ends. Corporations receive their returns in early April, and the return states a due date, normally within one month from the date of issue.
The IRD announces a Block Extension Scheme that gives longer deadlines when a tax representative submits the return. The dates depend on the financial year-end and whether the return is submitted electronically. Check the circular for the year concerned, because the dates differ by category.
What goes with the return:
- Companies: audited financial statements and a tax computation.
- Sole proprietors and partnerships: accounts or a profit computation, with supporting records available if asked.
After assessment, the IRD normally demands provisional profits tax for the following year, payable in two instalments, with a final settlement later. A business that has not received a return but is carrying on business should tell the IRD.
Legal basis and sources
The law
- Inland Revenue Ordinance (Cap. 112), ss.51, 56, 63B
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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