Accounting & Bookkeeping
Accounting & Bookkeeping
About Accounting & Bookkeeping
Section 51C of the Inland Revenue Ordinance requires every person carrying on a trade, profession or business in Hong Kong to keep sufficient records in the English or Chinese language of his income and expenditure to enable the assessable profits to be readily ascertained and such records shall be retained for a period of not less than 7 years. Our professional accounting services are managed by experienced accountants, coupled with the use of professional accounting software for accounts management, allowing clients to experience high quality accounting services, including:
Prepare management accounts including balance sheet and income statement
Perform bank reconciliations
Prepare analytical and supporting schedules
Set up, modify and maintain internal accounting and filing system
Provide other consultancy services and training to client
Accounting & Bookkeeping Services
The above accounting services could be provided on monthly, quarterly or yearly basis, according to the client’s needs. For client’s convenience, we also provide on-site accounting services.
Accounting and Bookkeeping
Hong Kong company needs only to pay Profits Tax every year, which is calculated by 16.5% (2007/08:17.5%) of the profits. The company without profits needs to pay no Profits Tax.
It is generally 31 March to 31 December of each year for the basis period of taxation according to custom. Hong Kong company has maximum 18 months for the first year’s basis period of taxation.
Accounting and Bookkeeping (3) :
Does Hong Kong need to levy tariffs on imported/exported commodities?
Generally imported/exported commodities need not be levied tariffs, except tobacco, liquor, and petroleum. But import/export commodities must be declared at customs.
There are three kinds of taxes in Hong Kong taxation: Profits Tax, Salaries Tax and Property Tax. Profits Tax shall be 16.5% (2007/08:17.5%) of the taxable profits of the company; Salaries Tax shall be calculated by salary income at progressive tax rate, and paid up to 15% (2007/08:16%) of total salary income; Property Tax 15% (2007/08:16%) of the net rent income earned from owning properties after deduction of 20% standard tax relief for renovation and expenditure.
The base period of assessment shall be one of the following periods:
The year ended on 31 March or 31 December, commonly
The year ended by the end of another month as permitted
Accounting and Bookkeeping (6) :
What restriction will Inland Revenue Ordinance have on deduction for donation?
Donation granted to a recognizable charitable organization is permitted to be deducted, but total assistance as required shall not be less than $100 and not more than 35% (2007/08:25%) of assessable profits.
Accounting and Bookkeeping (7) :
Can the profits of a Hong Kong company offset the losses of previous year?
Losses incurred in a taxable year can be carried forward and used to offset the company’s profits in subsequent years.
Profits Tax shall be levied according to the actual profits of the taxable year. However, since the profits of one year shall be determined only after the end of the year, Inland Revenue Department will levy provisional tax before the end of that year. After the profits of the relevant year are assessed in the following year, the temporary tax already paid can be deducted from the Profits Tax payable of this year.
If the corporate profits do not arise from Hong Kong, and the company has not set up an office in Hong Kong or hired Hong Kong employees, its earned profits will be exempt from Profits Tax.
Accounting and Bookkeeping (10) :
My Hong Kong company only opens account at bank, to collect and pay bills for other China Company, then does this Hong Kong company need to process accounting, auditing and tax declaration?
Yes. Because company incorporation is profit-oriented, even if the company in Hong Kong only performs the role of collecting and paying for others, it shall be deemed an agency service business. Its income shall be the commission for collection and payment for others.
Accounting and Bookkeeping (11) :
My Company only opens an account at a foreign bank in China and does not open account in Hong Kong; shall the business conducted by my company be free from tax declaration?
No. According to Hong Kong laws, all Hong Kong companies should declare their financial condition to Inland Revenue Department, whether its business takes place in Hong Kong or not. If this company does not have its source of income in Hong Kong, it can apply to Inland Revenue Department for exemption from taxation.
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