It is Time to Pay Tax in Hong Kong
HKTaxHave you received your tax assessment yet? ‘Why have I still not received the tax demand note?’, you may ask.
The Inland Revenue Department (“IRD”) has issued a notice on their website advising that the Inland Revenue (Amendment) (Tax Concessions) Bill 2019 was passed on 6 November 2019 by the Legislative Council. The new Ordinance gives effect to the tax concessions proposed by the Government in 2019, i.e. reducing salaries tax, tax under personal assessment and profits tax for the year of assessment 2018/19 by 100 per cent, subject to a ceiling of $20,000 per case. The IRD intended to issue Tax demand notes for the year of assessment 2018/19 in December 2019 though in reality many of us have still not received our tax bill. The IRD does however, expect to issue the majority of the demand notes for the year of assessment 2018/19 before the end of March 2020.
Due to the delay in issuing the assessment, due dates for tax payment are generally set 6 weeks after the respective dates of issue on the demand notes. As a result, tax payments are mostly falling due from January to May 2020. Therefore, please make due arrangements to pay taxes promptly in accordance with the due dates to avoid penalties and any inconvenience that may be caused by any recovery action taken by Inland Revenue.
Please be reminded that default in tax payment can lead to the following recovery actions. No prior notice will be given.
- Second tax instalment becoming immediately due.
- Immediate imposition of a 5% surcharge, plus a further 10% surcharge on sums that remain unpaid (including 5% surcharge) 6 months after due date.
- Recovery from third parties (including employers, banks, tenants or debtors).
- Institution of civil proceedings in court.
- Application for ‘Departure Prevention Direction’ to prevent the defaulter from leaving Hong Kong.
- Petition for bankruptcy/winding up order against the defaulter.
In the event you have financial difficulties in settling your tax bill by the due dates, you may apply to make payment by instalments. Whether the instalment plan be for the settlement of Salaries Tax, Profits Tax or Personal Assessment demand notes, provided that they are adequately adhered to, no surcharge will be imposed for a maximum period of one year from the respective due dates of the demand notes.
For more details on the above, please contact Kenneth Au at kennetha@zetland.biz/+ 852 35529093 or Lily Chow at lilyc@zetland.biz/ + 852 3552 9097 at Zetland Tax Advisors.
