What penalties apply if an online seller files an incorrect or late profits tax return?

The Inland Revenue Ordinance contains penalties for failing to file a return when required, for filing an incorrect return, and for giving false information.

• Failure to file or late filing: a penalty can apply, and the IRD may raise an estimated assessment based on its own figures. An objection to such an assessment must be lodged within the statutory period.
• Incorrect return without reasonable excuse: the Ordinance allows additional tax. It is calculated by reference to the tax undercharged, and the maximum is a multiple of that tax.
• Wilful intent to evade tax: can lead to prosecution, with fines and imprisonment as possible outcomes.

The IRD's normal time limit for raising an assessment is six years after the end of the year of assessment, and it is longer where fraud or wilful evasion is involved.

The Ordinance states the exact maximum amounts, so read the sections before relying on a figure. For online sellers, the common risk is an unreported platform payout or an unsupported offshore claim. Correct errors before the IRD finds them.