Y. H. Lai & Co.
黎裕衡會計師事務所
Tax · Hong Kong Profits Tax
Profits Tax returns, computations and correspondence with the Inland Revenue Department for Hong Kong companies and groups. We file returns electronically, so eligible returns can have one more month.
Who it is for
Most of our tax clients are Hong Kong companies whose accounts we audit, but we also act as tax representative for businesses audited elsewhere.
Companies that need their Profits Tax return filed correctly and on time every year.
Businesses expecting their first return and wanting to plan for it.
Groups with Mainland or overseas operations, offshore claims or transfer pricing questions.
Companies that have received questions from the IRD and need a careful reply.
Filing deadlines
A Profits Tax return is normally due one month after it is issued. As your tax representative, we file under the IRD's block extension scheme, and because we file electronically, eligible returns can have a further month. We have filed online since the IRD launched its new Profits Tax e-filing service in April 2023.
Without a tax representative
Generally one month from the date the return is issued.
With a tax representative
Deadlines set by your year-end code (N, D or M), so the work follows your accounting year.
Filed electronically by us
For eligible returns we file online, we apply for a further month. The application must reach the IRD at least seven working days before the normal due date.
Example: year of assessment 2025/26
| Year-end | Block extension | Filed electronically |
|---|---|---|
| 1 Apr – 30 Nov 2025 (N code) | 4 May 2026 (no block extension) | 4 June 2026 |
| 1 – 31 Dec 2025 (D code) | 31 August 2026 | 2 October 2026 |
| 1 Jan – 31 Mar 2026 (M code) | 16 November 2026 | 16 December 2026 |
| M code, loss case, on application | 1 February 2027 | 1 February 2027 (no further extension) |
These are the IRD's dates for 2025/26 and change every year. Extensions depend on eligibility and on applying in time; first returns and other special cases have their own dates. Filing later does not change the date for paying tax.
What we do
Each engagement is agreed in writing. Our Profits Tax work covers:
Rates
The lower rate applies to the first HK$2 million of assessable profits. Only one entity in a group of connected entities can elect the lower rate.
| Taxpayer | First HK$2,000,000 | Remainder |
|---|---|---|
| Corporations | 8.25% | 16.5% |
| Unincorporated businesses | 7.5% | 15% |
Documents
If we also audit your company, most of this comes from the audit file. Otherwise we usually ask for:
Process
We plan the work from your filing date, so the return is ready before the deadline.
We review your accounts, last year's computation and any open matters with the IRD.
We prepare the tax computation and identify claims, elections and adjustments.
We explain the result in plain language and file the return electronically once you approve it.
We check the assessment, provisional tax and any later questions from the IRD.
Fees
We agree the fee before we start. The main factors are:
The number of tax adjustments, claims and elections needed.
Offshore claims, transfer pricing and double taxation relief.
Enquiries, objections or field audits that need detailed replies.
Tax work is usually quoted together with the audit. If another firm audits your accounts, send us the latest audited financial statements and tax computation for a quotation.
Questions
It depends on your accounting year-end. Returns are usually issued in April. As your tax representative we file under the IRD's block extension scheme, and returns we file electronically can usually have one more month. For 2025/26, a return for a March year-end is due on 16 November 2026, or 16 December 2026 if filed electronically.
Yes, if the business has profits chargeable to tax. A taxpayer who has not received a return must notify the IRD in writing within four months after the end of the basis period. A new company usually receives its first return around eighteen months after incorporation.
Provisional tax is an advance payment for the following year, normally based on the previous year's assessable profits. If you expect profits to fall, you may apply to hold over some or all of it. We check whether a holdover application is worthwhile when we prepare your return.
Hong Kong taxes only profits arising in or derived from Hong Kong. Whether profits are offshore depends on the facts, mainly where the operations that produce them are carried out. Claims need solid documentation, and the IRD often raises enquiries about them.
Generally at least seven years. Keeping invoices, contracts, bank records and correspondence in good order also makes it much easier to answer any IRD enquiry.
Send it to us as soon as it arrives, because replies have deadlines. We review the question, gather the supporting documents with you, prepare the reply and, where needed, ask the IRD for more time.
Experience
Your tax work is reviewed by our partner, RICHARD LAI, Yu Hang, a practising CPA and Fellow of the HKICPA. Because we usually audit the same accounts, tax issues are picked up during the audit rather than at the filing deadline.
Send us your latest audited accounts and group chart. We will reply with a fee quote and a proposed timetable.