Filing Individual Tax Returns in Hong Kong: A Complete Guide

The filing of individual tax returns in Hong Kong has commenced, with deadlines and extensions announced by the Hong Kong tax agency. General taxpayers should submit their tax returns on or before June 3, 2024, while the deadline for submission by sole proprietors of unincorporated businesses is August 2, 2024. A one-month automatic extension is granted to all taxpayers who file their tax returns electronically. Hong Kong taxpayers are advised to start preparations early and allocate sufficient resources to meet this tight deadline.

Hong Kong Inland Revenue Department (IRD) has issued the Individual Tax Returns for 2023/24. Relevant taxpayers are required to complete and send the tax return back to the IRD within one month or three months from the date of issue. Failing to file the individual tax return in time will trigger a penalty or prosecution.

In this article, we will introduce you to the individual tax return obligations in Hong Kong and provide a complete guide.

What is the individual tax return in Hong Kong?

Individual tax return involves the comprehensive reporting of personal financial information, such as income, deductions, and credits, which will be used to calculate the taxes owed or the tax refund due to the taxpayer.

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In Hong Kong, the individual tax return consists of Tax Return – Individual (BIR60), the Appendix to BIR 60, and any required supplementary forms. Every year at the beginning of May, the IRD issues the individual tax returns for individual taxpayers.

Relevant taxpayers should complete, sign, and return the individual tax returns to the IRD within the time limit stipulated in the return, regardless of whether they have income that is chargeable to tax or not.

Who should complete the individual tax return in Hong Kong?

Individual tax returns are issued to individual taxpayers to report their salaries, rental income from solely owned properties, and profits from sole-proprietorship businesses, and to elect personal assessment.

If the taxpayer is married for all or part of the year and has elected joint assessment / personal assessment or has been nominated by their spouse to claim home loan interest deduction, their BIR60 should also be signed by the spouse.

When to file the individual tax return in Hong Kong?

Time limit

The individual tax return should be filed:

• within one month from the date of issue of the tax return if the taxpayer did not solely own any unincorporated business during the year of assessment; or
• within three months from the date of issue of the tax return if the taxpayer solely owned any unincorporated business during the year of assessment.

Given that an automatic extension of one month will be given for filing the tax return for the year of assessment 2023/24 electronically, the deadlines for filing the individual tax returns in 2024 are:

Extensions

In addition to the automatic extension granted to e-filings, there are two types of extensions available for individual tax return filing – extension based on the Block Extension Scheme and extension based on individual application for difficulties.

Under the Block Extension Scheme, an extension of time for submission of tax returns is granted to those individual taxpayers who have appointed a tax representative. Requests for extension beyond the extended due dates would be granted only in the most exceptional circumstances. Applications for further extension should be made in writing on a case-by-case basis. If the reasons or exceptional circumstances are the same for employees of a particular company, the requests for further extensions could be made by way of a list.

An individual application for extension is granted to those individual taxpayers who have great difficulties in submitting their tax return in time. The applicant should state the reason why the tax return cannot be submitted within the prescribed time. Such application will only be granted in exceptional circumstances.

What documents should be submitted?

In general, relevant individual taxpayers should submit the BIR 60, the Appendix to BIR 60, and any required supplementary forms.

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Documentary evidence in support of the deduction or allowance claims need not be submitted. However, taxpayers should retain such documentation for a period of at least six years after the expiration of the relevant year of assessment. The taxpayer may be required to provide such evidence in the event that their case is subsequently selected for review.

If the taxpayer claims relief under any Double Taxation Agreement (DTA) or applies for full or partial exemption of income, supporting documents should be submitted with the return.

How to file the individual tax return?

The individual tax return can be filed by paper or by electronic filing.

If the taxpayer chooses to file a paper tax return, they must submit the original tax return issued by the government. Photocopies or fax copies of tax returns are not acceptable. Filing a copy of the BIR60 which was downloaded from the Internet is also not acceptable.

The paper tax return can be then submitted by post or in person.

How to fulfill the individual tax return obligation efficiently?

For individual who are employees, they are suggested to collect a copy of the IR56B form from the employer before preparing the employment income part in individual tax returns.

For sole proprietors, they need to report the business profits generated under sole proprietorship according to the financial statements for the period from April 1, 2023 to March 31, 2024.

Relevant individual taxpayers are advised to collect and keep sufficient supporting documents related to the income, deductions, and allowances claimed in the individual tax return.

For taxpayers who have assessable income but do not receive the individual tax returns from the IRD by early May, they should promptly request the tax agency to issue a return.

Non-compliance with filing requirements, including late filing or making incorrect returns, can result in penalties or even criminal prosecutions. Taxpayers are well advised to seek professional advice from qualified tax consultants if they are unsure how to handle their individual tax return obligations.

Dezan Shira & Associates tax team in Hong Kong can assist with the preparation of the tax return as well as conducting a tax review on your current reporting strategy. To schedule a meeting with our team, please contact China@dezshira.com.

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