Does a dormant Hong Kong company still have tax obligations?

Filing. Becoming dormant does not by itself switch off the requirement to file a Profits Tax Return when the Inland Revenue Department (IRD) issues one. The IRD may stop issuing returns to a business with no assessable profits, but when you receive one you must complete it. If the company is chargeable and has not received a return, you must notify the IRD within 4 months after the end of the basis period.

Audit exemption. Under section 5 of the Companies Ordinance a private company (other than a bank, insurer, licensed securities firm and similar regulated companies) can pass a special resolution declaring itself dormant and deliver it to the Registrar. It is then exempt from audited financial statements under section 447, and the IRD says it will accept returns from such dormant companies without audited financial statements. A company that has not formally become dormant remains subject to the normal audit requirement.

Other ongoing duties

• Business registration fee and levy continue until the company is dissolved or deregistered.
• A company that has not formally become dormant must still deliver its annual return to the Companies Registry. A formally dormant company is exempt from the annual return (section 663) until it enters an accounting transaction.
• Keep records for at least 7 years.
• If the company has no business at all, state industry code 000000 on the return.

If you do not need the company, consider deregistration (see the answer on deregistering a Hong Kong company), which needs an IRD notice of no objection.