What is an estimated assessment and what should I do if I receive one?
An estimated assessment is a tax charge the IRD raises on its own estimate when a return has not been filed by the due date. Do not ignore it: file the correct return and lodge a written objection within one month of the notice date, and ask to hold over the tax if appropriate.
When a profits tax return is not lodged by its due date (including any extended date), the IRD may issue an estimated assessment using whatever information it has. These are often much higher than real profits.
What to do
- Note the notice date. You have one month from the date of the notice of assessment to give written notice of objection (section 64). The IRD can extend this only where you were prevented by absence from Hong Kong, sickness or other reasonable cause.
- File the return and accounts promptly. Include all the required documents and the tax computation.
- Object in writing and state precisely why, for example "the assessable profits are HK$X as shown in the return".
- Ask to hold over the tax. The IRD may stand over the tax subject to conditions, such as buying Tax Reserve Certificates for part of the disputed amount.
- Pay what is due by the date on the notice, or apply for instalments. Tax not paid by the due date is in default and a 5% surcharge can apply to the balance.
Risks of leaving it: if the assessment becomes final, you are bound to pay it. Repeated estimated assessments can also lead to higher penalty percentages for late filing.
An estimated assessment does not replace the return; the IRD can still seek penalties for the late return.
Legal basis
- Inland Revenue Ordinance (Cap. 112), s.59
- Inland Revenue Ordinance (Cap. 112), s.64
- Inland Revenue Ordinance (Cap. 112), s.71
Sources
Applies to YA 2025/26 · 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
- What happens when the IRD questions my offshore profits claim?The IRD assessor has power to ask for full information on any matter affecting tax liability, including detailed questions about how a transaction was carried out. You should respond with documents, not assertions. If the claim is rejected you can object within one month, and wrongly claiming offshore status can lead to additional tax.
- How far back can the Hong Kong IRD audit my company?The IRD's field audit and investigation normally cover the 6 years of assessment before the year the investigation starts. Where there is fraud or wilful evasion, it extends to 10 years. Ordinary additional assessments are generally limited to 6 years after the year of assessment ends.
- When will a new Hong Kong company receive its first profits tax return?The IRD generally issues the first Profits Tax Return about 18 months after the date of incorporation. A first-time recipient has 3 months from issue to file. If you are chargeable to tax and receive nothing, you must notify the IRD in writing within 4 months after the end of the basis period.
- What is the filing deadline for the Hong Kong profits tax return?The due date is printed on page 1 of the return, normally one month from issue. First-time recipients get 3 months, and e-filers under the e-notice get 2 months. Represented taxpayers usually get later dates under the Block Extension Scheme, depending on the accounting year-end.
- How does the Block Extension Scheme work for profits tax returns (N, D and M codes)?With a tax representative, the due date depends on your accounting year-end code. For 2025/26: N code no extension; D code (December) 31 August 2026 on paper, 2 October 2026 if e-filed; M code (1 January to 31 March) 30 November 2026 on paper, 30 December 2026 if e-filed. The D and M dates were later extended from 17 August and 16 November.