Does a dormant Hong Kong company still have to file a profits tax return?
Dormancy under the Companies Ordinance relieves the company from audited accounts, and IRD accepts a profits tax return from it without the audited statements. It does not by itself cancel the duty to file a return when IRD issues one.
What IRD says
- A private company that has delivered the s.5 dormancy special resolution to the Registrar is exempt from audited financial statements under s.447, and IRD will accept its profits tax return without the supporting audited statements.
- The circular to tax representatives lists dormant companies as an exception to the rule that audited financial statements go with the return.
- IRD's FAQ also states that an I.R.C.1812 letter (which excuses a temporary filing) does not remove the duty to prepare audited accounts each year under the Companies Ordinance. In other words, tax-side dormancy and company-law dormancy are separate.
What to do
- Keep the s.5 filing record and show it if IRD queries the missing audit.
- On the return, if there was no business activity in the basis period, the notes direct you to enter industry code 000000.
- Do not assume that being dormant removes the return. Answer notices from IRD or tell them in writing.
Limit of this answer How IRD treats business registration, returns after a long period of inactivity, and cessation is a tax matter. Ask IRD or a tax representative if you want to formally report a cessation of business.
Legal basis
- Companies Ordinance (Cap. 622), s.5
- Companies Ordinance (Cap. 622), s.447
- Inland Revenue Ordinance (Cap. 112), s.51
Sources
Applies to 2026 · Last reviewed 29 October 2026
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.
Related questions
- How do I make my Hong Kong company dormant to avoid the audit?Check the company qualifies, pass a special resolution declaring it will become dormant from a stated date, and have the directors deliver that resolution to the Companies Registrar. Dormancy takes effect from the delivery date or the later date in the resolution.
- Does every Hong Kong limited company need an audit?Yes. Every Hong Kong company must have an auditor for each financial year and its financial statements audited, whatever its size or whether it trades. The only company that escapes is a qualifying private company that has validly become dormant under s.5 and s.447 of the Companies Ordinance.
- Do I still need an audit if my company had no revenue or no business activity?Yes, unless the company has formally become dormant. Having no sales does not make a company dormant in law. If it had any expenses, bank charges or other recorded transactions, the audit duty continues for that year.
- My company is loss-making. Do I still need to audit it?Yes. Profit or loss has no bearing on the audit requirement. A loss-making company is audited every year, and the auditor will also look closely at going concern.
- What is the dormant company audit exemption in Hong Kong?A qualifying private company that has become dormant under s.5 of the Companies Ordinance does not need to appoint an auditor or have its accounts audited while it stays dormant. The exemption is in s.447, not in s.448, which deals with false statements in reports.