Preparation and filing of annual financial statements and tax returns.
Declaration of profits from sources outside Hong Kong for tax exemption.
Ensuring 100% compliance with the Hong Kong Inland Revenue Ordinance for your company.
Over 50 filed and proven reports under the Hong Kong territorial principle of taxation.
- Multicurrency accounting of all transactions in Xero according to the tariff
- Automated system of primary documentation transfer
- Сhecking the availability of primary documents for each transaction
- Monthly management reporting
- Setting up master schedules and dashboards
- Unaudited annual financial statements (when paying for the whole year).
Companies whose source of profit is located in Hong Kong. Pay income tax under Hong Kong’s two-tier taxation system
Companies deriving profit from sources outside Hong Kong. Use the right to exemption from tax on company profits according to the territorial principle of taxation
Companies wishing to keep up-to-date accounting of economic activities. Reflection of postings on the fact of transactions.
Companies wishing to do accounting by the restore method. Reflecting entries upon completion of the fiscal year.
- Minimization of risks in the company’s work process
- Current financial position of the company to make informed decisions
- Reducing the time required to conduct an annual audit by half or more
- Full compliance with reporting deadlines and no penalties for violations
- Reducing the cost of the annual audit by up to 40%
- Availability of interim financial reports without costs
- Reputation as a reliable counterparty for banks, investors and partners
- The №1 cloud-based accounting software.
- Ability to integrate with Airwallex
- 800 integrations with other banks and services
- A wide range of dashboards for company finances
- Convenient accounting functionality
- Automatic generation of reports
- Online invoicing of counterparties
- Secure database
Leave an application now and get a PDF file with the basic principles of territorial taxation system
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Frequently asked questions
Limited Liability Companies in Hong Kong are required to file an annual Profits Tax Return (BIR51). Newly incorporated companies must file their first Return 18 months after incorporation. The declaration must be accompanied by the following documents:
- Annual financial statements (balance sheet, income statement, cash flow statement, explanatory notes, tax calculation statement).
- Auditor’s report on the annual financial statements.
- If there are grounds for application of income tax exemption – Statement of the right to apply the territorial principle of taxation.
There is no such need. You can choose the way that is most convenient for you. Daily (up-to-date) accounting is suitable for companies that are active. If the business has few operations, you can dip into finances once a year and prepare financial statements at the end of the financial year. However, it is important to keep all primary documentation throughout the year and to comply with all statutory deadlines.
Yes, under the Companies Ordinance (Section 405) all Hong Kong companies are required to have their financial statements audited annually and submit it to the Inland Revenue Department along with their tax returns.
As a rule, these are: bank statements from all accounts of the company, contracts, invoices for payment. All documents must be kept by the company for seven years from the date of the transaction.
Hong Kong adopts the principle of territorial source taxation. Only profits which have their source in Hong Kong are taxable. Profits from other sources are not subject to tax in Hong Kong.
Profits from Hong Kong source are taxed under the two-tier system: 8.25% on the first 2 million HKD of taxable income and 16.5% on the rest of the taxable income.
Every year the company submits a tax return to the Hong Kong Inland Revenue Department, and along with it an audited financial statement. If there are grounds for application of income tax exemption in Hong Kong, the company prepares and submits a statement of eligibility for exemption on the basis of territorial taxation. The Inland Revenue Department analyzes the submitted documents. If there are no questions and doubts, the Department issues a letter confirming that the company’s profits are not subject to taxation. If there is reason to doubt the accuracy of the determination of the territory of the source of profit, the Inland Revenue Department sends a request for additional data. After analyzing the information provided, a decision is made, which is also recorded in a separate letter.
Advantages and disadvantages of establishing and running business in Hong Kong
Hong Kong offers extensive opportunities for doing business both in the domestic and international arena. Among the advantages are an interesting tax system, no VAT, a wide range of corporate legal instruments, and much more. A full list of advantages and also disadvantages of Hong Kong is provided in this article.
Hong Kong company annual requirements
Like any other country, Hong Kong has a number of mandatory regulatory requirements that are necessary for the successful operation of your business.
1. Annual renewal of company registration
2. Closing of the financial year.
3. Filing reports on personnel.