Summary of types of reports that Hong Kong companies need to submit annually?

Hong Kong companies must hold an AGM every financial year of the company, rather than every calendar year.

Note: A single-member company (for example, a company with only 1 DIRECTOR) does not need to hold a general meeting of shareholders.

Every year, Hong Kong companies are required to file AGM and AR to update company information with the Hong Kong government.

A Hong Kong company must file its AGM and AR with the CR within 42 days after the anniversary of its incorporation in that year.

The annual report will be presented as form NAR1 for submission to Hong Kong Corporate Regulatory Authority (CR). The contents of this report include:

• Company details.
• Business registration address.
• Directors, shareholders, company secretaries, etc.

The Business Registration Office will send a Business registration renewal demand note around the middle of the month prior to the month in which the Business Registration Certificate is to be renewed.

For example, if the renewal of the Business Registration Certificate will begin in May, the Business Registration Office will issue the request in mid-April.

If no such notice is received, the enterprise must notify the Commissioner in writing within 1 month from the date of expiry of the enterprise's current Business Registration Certificate.

This is an annual report of the salary and all other benefits received by an employee of a Hong Kong company. All income of employees of a Hong Kong company, regardless of where they have worked (in Hong Kong or overseas) must be reported through forms BIR56A and IR56B.

Hong Kong companies are required to maintain and retain employee salary records for at least 7 years; and report employee payments via Forms BIR56A and IR56B and the following Detail Forms: IR56E; IR56F; IR56G.

In addition, the Hong Kong government encourages businesses to submit reports online to facilitate document preparation.

The Inland Revenue Department of Hong Kong will issue BIR56A and IR56B forms to Hong Kong companies on the first working day of April each year.

Hong Kong companies must complete and return BIR56A and IR56B applications within 1 month from the date of issue.

The annual corporate income tax report includes three forms for different subjects as follows:

• Hong Kong Company: BIR52
• Individual: BIR52
• Foreign Individual: BIR54

The annual corporate income tax report must be submitted with the following reports:

• Business balance sheet
• Audit report
• Business profit and loss statement

With the above reports, the Hong Kong government can assess the company's profits or see adjusted losses, and from there calculate the corporate income tax that the Hong Kong company must pay in that year.

Note:

• Hong Kong's corporate income tax rate is currently 16.5% - the lowest in the Asia-Pacific region.
• Hong Kong companies that conduct business and have income arising outside Hong Kong are not subject to corporate income tax in Hong Kong.
• Every year, Hong Kong companies also receive tax incentives and tax exemptions from the Hong Kong government. The exemptions and incentives will change every year and are determined by the Hong Kong tax authority.

The annual corporate income tax return and related reports must be filed within 1 month from the date the Hong Kong company receives the notice from the Hong Kong Revenue Department.

This notice is normally issued periodically on April 1 of each year.

However, depending on the business's operating time, the time when the business receives the notice to submit the Corporate Income Tax Report from the Hong Kong Tax Department will be different, specifically:

• Newly established business: This business will receive its first corporate income tax report 18 months after the date of commencement of business or the date of establishment.
• Long-standing enterprises: Corporate income tax declaration reports will be issued on the first working day of April every year.
• In particular, to support Hong Kong companies that have not had much activity or are temporarily suspending operations, the Hong Kong Tax Department may not issue notices requiring the submission of “Income Tax Returns” to these companies.

However, unless otherwise advised or instructed by the Hong Kong Revenue Department, Hong Kong companies should still file an annual Corporate Income Tax Return.

According to the regulations of the Hong Kong government, all Hong Kong companies are required to prepare financial statements. And these statements must be audited by an independent external auditor to verify the entire cash flow of transactions within the enterprise. In order to support enterprises in preparing financial statements conveniently, the Hong Kong government encourages enterprises to conduct a search for auditing units that are legally qualified to provide auditing services.

Audited financial statements must include:

• Statement of financial position
• Statement of profit or loss and comprehensive income
• Statement of changes in equity
• Statement of cash flows

Hong Kong applies the territorial principle of taxation. Only profits generated in Hong Kong are taxed there. Profits derived elsewhere are not subject to Hong Kong corporate income tax. Therefore, businesses can reduce their tax liability to the government by filing an exemption application for income generated outside Hong Kong.

To successfully apply for tax exemption, businesses need to prepare the following documents:

Annual financial statements (audited by external auditors)

Application for exemption from tax on income derived outside Hong Kong

Relevant financial documents or foreign transaction papers:

• Receipts
• Contract, statement
• Receipts, letters, etc.

• For first filing: 18 months after the company files its corporate income tax return.
• For subsequent applications: Every 12 months after the business's first application is issued.