Every April, most companies and organisations in Hong Kong receive the annual Profits Tax Returns (Form BIR 51) and Employer’s Returns issued by the Hong Kong Inland Revenue Department (IRD). These forms are essential for complying with local tax obligations and avoiding potential penalties.

Employer’s Returns

Employer’s Returns (Form BIR 56A and IR56 series) are issued to companies and organisations to report remuneration paid or accrued to their directors and employees for the tax year ended 31 March.

The deadline for submission is typically within one month from the date of issue. It is the employer’s legal obligation to ensure the return is complete and accurate, as discrepancies may affect the individual tax liabilities of employees and directors, and may trigger follow-up enquiries or audits from the IRD.

Particular attention should be paid to the correct reporting of:

• Director’s fees vs. salaries – these may have different tax implications and must be disclosed correctly.
• Housing benefits – subject to specific tax rules, and can have tax consequences to directors and employees.
• Share-based compensation – such as share options and awards, which may be reported/taxed when granted, vested, or exercised – mainly depending on the share benefit scheme of each employer.
• Repatriation and relocation benefits – especially relevant for expatriate staff. Taxability shall mainly depend on the nature and arrangement of the benefits offered.
• Termination and severance payments – which may be exempt or partially taxable depending on the circumstances.

Employers should maintain detailed records and consider professional advice to manage these complexities.

Profits Tax Returns

Profits Tax Returns require companies to declare their assessable profits (or adjusted losses) and any tax payable for the applicable year of assessment (YoA). These are generally issued annually in early April.

There are 3 series of profits tax return forms. The BIR51 is the standard form issued by the IRD to corporations in Hong Kong.

For Persons Other Than Corporations (such as partnerships), BIR52 applies. Non-resident businesses earning Hong Kong-sourced income without a registered local entity should file BIR54.

1. Required documents for a valid profits tax filing

Generally, a valid profits tax return must include the following documents:

• The original signed Profits Tax Return (copies are not accepted);
• A profits tax computation with supporting schedules; and
• Audited financial statements, including an auditor’s report where required by Hong Kong or foreign law, balance sheet, and profit and loss account for the relevant period.

2. Filing deadline

The general deadline for submission of a profits tax return is within 1 month of issuance of the notice.

For newly formed companies, the first profits tax return will be issued around 18 months after the incorporation date, and the filing deadline of the first PTR will normally be within 3 months from the date of issuance. Subsequent returns are filed annually.

Extended due dates are available depending on the company’s Financial Year End and filing method (paper vs electronic filing).

For the YoA 2024-2025, the extended due dates are as follows:

Financial Year End (FYE)	Extended due date	Electronic filing extended due date
FYE between 1 April and 30 November (N code)	No extension	2 June 2025
FYE between 1 and 31 December (D code)	29 August 2025	29 September 2025
FYE between 1 January to 31 March (M code)	Profit cases: 17 November 2025 Loss cases: 2 February 2026	Profit cases: 17 December 2025 Loss cases 2 February 2026

3. Possible consequences for late filing of Profits Tax Returns

Failing to file a valid return by the due date without reasonable excuse can result in:

• Compound penalties up to HK$10,000;
• Estimated tax assessments issued by the IRD;
• Additional tax penalties under Section 82A of the Inland Revenue Ordinance;
• Prosecution in serious cases.

4. Other important considerations

• Obligation to notify the IRD of chargeability and request for issuance of a Profits Tax Return

If a company has not received a Profits Tax Return but has generated assessable profits, it must notify the IRD in writing within four months after the end of the relevant basis period. Failure to do so may attract penalties unless a valid excuse can be provided.

• Obligation to file a correct Profits Tax Return

Profits Tax Return has to be completed with due care in order to avoid penal/prosecutions actions to be taken by the IRD for an incorrect return filing and/or an incorrect information supplied.

Special care is needed when making:

• Offshore claims or tax exemptions;
• Expense deductions;
• Disclosures of related-party transactions;
• Completing the relevant supplementary forms to the profits tax returns, such as election for the reduced profits tax rate of 8.25% under the two-tiered profits tax rate regime and application of the Foreign Sourced Income Exemption (FSIE) Regime, requirement of preparation of master file, local file and Country-by-country Report/notification.

Taxpayers must be prepared to support such claims with documentation and sound reasoning.

HKWJ Tax Law can help

Filing tax returns in Hong Kong can be complex, especially with evolving regulations and strict compliance requirements.

As a Hong Kong-based tax law firm, we assist local and international businesses in preparing, reviewing, and filing Employer’s Returns and Profits Tax Returns with accuracy and efficiency.

Whether you need ongoing compliance support or advice on specific tax positions, our team is here to help you stay compliant while optimising your tax position.

Contact us today to schedule a consultation and ensure your filings are handled with precision and peace of mind.