Must I tell the IRD I'm chargeable to tax if I got no tax return?

Section 51(2) of the Inland Revenue Ordinance requires every person who is chargeable to tax for a year of assessment, and who has not been sent a return, to tell the Commissioner in writing within 4 months after the end of the basis period. For a business with a 31 March year-end, that means by the end of July.

Who needs to do it: new businesses (commencement cases), taxpayers who have been told the Inland Revenue Department (IRD) will no longer issue returns every year, and anyone who becomes chargeable unexpectedly (for example, a first profitable year). A taxpayer who received returns last year and can reasonably expect one this year does not need to notify.

Consequences. The IRD tells assessors to look for failures to notify chargeability and to start penalty action if the taxpayer has no reasonable excuse. Penalties under sections 80 and 82A are described in the answer on late filing penalties.

Ceasing business. A person who stops a trade, profession or business must notify the IRD in writing within one month of ceasing (section 51(6)). A person leaving Hong Kong for more than a month must also notify, at least a month ahead (section 51(7)).

Tip: for a new company, set a reminder four months after the end of its first accounting period, and register for business registration within one month of starting.