In this course · 5 of 8
Course 9
Stay safe with the IRD
8 lessons · 10 min
- 1What are the penalties for filing a Hong Kong profits tax return late?
- 2What is an estimated assessment and what should I do if I receive one?
- 3How long do I have to object to a Hong Kong tax assessment?
- 4How far back can the Hong Kong IRD audit my company?
- 5How long must I keep business records in Hong Kong for tax?
- 6How do I change my tax representative in Hong Kong?
- 7Does a dormant Hong Kong company still have tax obligations?
- 8Do I need an IRD notice of no objection to deregister a Hong Kong company?
The short answer
Hong Kong businesses must keep records for at least 7 years after the transactions are completed (section 51C). Records must be in English or Chinese and sufficient to work out assessable profits. Failing to keep adequate records without reasonable excuse can bring a fine of HK$100,000.
The Inland Revenue Ordinance requires every person carrying on business in Hong Kong to keep sufficient records of income and expenditure, in English or Chinese, so that assessable profits can be readily ascertained.
- Retention: keep business records for at least 7 years after the transactions they relate to are completed (section 51C).
- Penalty: failure to keep sufficient records without reasonable excuse can lead to a fine of HK$100,000 (section 80(1A)).
- Employers: keep payroll records for at least 7 years.
- Rent records: landlords have a separate duty (section 51D).
Keeping records is also what lets you support offshore claims, deductions, and the figures in your tax computation if the Inland Revenue Department (IRD) asks questions within its audit look-back period (normally six years of assessment, ten for fraud or wilful evasion).
Legal basis and sources
The law
- Inland Revenue Ordinance (Cap. 112), s.51C
- Inland Revenue Ordinance (Cap. 112), s.80(1A)
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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