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What's News |
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[ 2024-6-20 ]
tax bureau score sheet
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Last month, the tax bureau issued the results list for 2023/24, which is also the "sad list" for taxpayers. Overall tax revenue was 342 billion dollars, down 5% year-on-year, but this was mainly due to a decrease in stamp duty and only a slight decrease in profits tax. In contrast, salaries tax revenue increased by 0.5%. Among the series of numbers, there are two points worth paying attention to:
1. Personal tax returns: 2.44 million personal tax returns were issued in 2023/24, an increase of 40,000 from the previous year; the number of people with an annual salary of more than 900,000 increased by 10%, and the number of employees and wage income increased, showing the tight labor market and wage costs The upward trend runs counter to the overall economic downturn and is unfavorable to Hong Kong's business environment.
2. Tax collection situation: Merchants are more concerned about tax collection situation. According to figures provided by the tax bureau (see table below), 1,802 recovery cases were completed, maintaining the highest level and rising for five consecutive years. For each investigation case, the final tax and fine recovered amounted to an average of 1.8 million dollars, a significant increase of 28% from the 1.4 million dollars in the previous year. From the fact that the number of investigation cases has remained at the highest level and the number of tax recoveries in each case has increased significantly, it can be seen that the rumors in the market that the government is poor and wants to increase the number of investigation cases to recover taxes are not unfounded. In fact, the number of cases our company has received from new customers requesting assistance in handling tax investigations has increased significantly in the past two years, which shows that the tax bureau has adopted a more aggressive approach to tax inspections.
The best way to avoid being audited by the tax bureau, resulting in overpayment of taxes and fines, is of course to file a tax return every year, including preparing appropriate accounting records, expense receipts, and accurately calculating the tax payable, etc. The ideal thing is to pass it smoothly, without the tax bureau asking questions, but if you encounter questions from the tax bureau, you can answer them as quickly as possible; instead of filing taxes randomly or making false tax returns.
Our company has many years of experience in handling different types of tax cases and tax investigations. If you have any tax issues, please feel free to contact our company.
(Some pictures are taken from the public Internet. If there is any copyright, please notify us for deletion)
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[ 2024-6-13 ]
Do I need to set up a company?
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Although Hong Kong's economy is currently in a sluggish state, there are still many people starting their own businesses, including those who are proactive and those who are passive (unemployed and forced to start a business). Many entrepreneurial friends ask: I am just starting a business, and I am just doing a small business. Should I set up a company? (Or ask: Should I apply for business registration?)
According to the Hong Kong Business Registration Ordinance (Chapter 310), business registration is required for all businesses operating in Hong Kong (small businesses are exempted: the average monthly turnover of the service industry does not exceed 10,000 dollars, and other businesses do not exceed 30,000 dollars); including In some industries, such as piano teaching, tutoring, online trading, outsourcing, consulting, etc., it is actually illegal if they fail to apply for business registration.
Some friends also asked: Should I set up a company? In an informal way: there are two types of companies in Hong Kong, one is a "limited company" and the other is an "unlimited company". A limited company is a limited company registered and established in accordance with the Companies Ordinance (Chapter 622). It is an independent legal entity. The legal liability of shareholders is limited. Tax filing is done independently in the name of the company. An independent audit is required every year. The operating cost is relatively high. . The so-called "unlimited company" is a relative term to "limited company". It does not actually exist. It is just customary to refer to an individual operating a business. After applying for a business registration certificate, it is considered an "unlimited company" and is equivalent to the personal responsibility of the proprietor. , the liability is unlimited, tax returns are filed together with the owner’s personal tax returns, no audit is required, and operating costs are relatively low.
To summarize briefly: any business operating in Hong Kong (except for small amounts) must undergo business registration. You can apply for an "unlimited company" business registration certificate in your own name, or apply for a business registration certificate by setting up a limited company. There are big differences between the two in terms of legal responsibilities, tax responsibilities, risk management, etc. Entrepreneurs can choose to use one of these methods to apply for business registration according to their own circumstances.
Our company is handled by licensed senior accountants who can answer questions and establish various company structures for customers. If you have any questions about the company, please feel free to contact us.
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[ 2024-6-7 ]
"Non-Hong Kong company" in Hong Kong
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"Non-Hong Kong company" in Hong Kong
According to reports, a large Hong Kong group has actively arranged for its overseas-registered subsidiaries to be registered in Hong Kong as "non-Hong Kong companies" in recent years, with the number reaching hundreds. The businesses of these "non-Hong Kong companies" cover investment, telecommunications, ports, etc.
What is an overseas registered company? Why should I register as a "non-Hong Kong company" in Hong Kong? what is the benefit? Let us answer it for you.
A Hong Kong company is, of course, a company incorporated in Hong Kong. A Hong Kong company is registered in Hong Kong and has its base in Hong Kong. Basically, all income must pay Hong Kong profits tax. Overseas companies refer to companies incorporated in other areas outside Hong Kong. The base is not in Hong Kong but at the place of registration. However, as long as it is registered in Hong Kong as a "non-Hong Kong company", it can operate business in Hong Kong. According to Hong Kong tax regulations, only profits earned from operations in Hong Kong are subject to Hong Kong profits tax. Based on this alone, everyone can see the tax advantages of "non-Hong Kong companies".
For a "non-Hong Kong company", the place of registration is overseas, and the final ownership of the assets is of course also at the place of registration. This is also a way of risk management.
In fact, "company" is just a tool. Using different tools to produce different effects is the so-called "financial technique"; in fact, with only slight adjustments, you can achieve different effects, and the effects can be huge.
Our company is a Hong Kong licensed accounting firm with many years of comprehensive and in-depth business experience. We can advise clients on using different "companies" as tools to build the required structures to achieve different purposes and effects.
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[ 2024-5-31 ]
How difficult is it to open a corporate bank account?
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good news! The Hong Kong Monetary Authority announced nine policies on March 28 to support small and medium-sized enterprises in obtaining bank financing and assist them in their continued development.
Unfortunately, the new nine policies do not mention relaxing the requirements for opening a bank account, that is, it will be as usual.
As the economy returns to normal, many clients are asking for the applications of opening corporate bank accounts. Nowadays, an important concern for many clients when setting up a company is whether they can successfully open a bank account.
It is indeed very difficult to open an account now. You can know the degree of difficulty by taking a look at the process: First, you need to make an appointment, and then you need to provide a series of company documents to the bank for approval, including: company establishment documents, business plans, shareholder background, and internal transaction records. , external business documents, etc.; the bank has to do due diligence and other procedures. The back and forth process can take several months, but it is unknown whether the account can be successfully opened. If it is unsuccessful, the bank will not provide the reason.
Our company has close working relationships with many banks, including large, medium and small banks. Our company can assist customers in identifying bank accounts. We will first conduct a preliminary review based on the customer's company type, documents provided, etc., and then arrange for a suitable bank to open an account. We will then follow up closely with the bank, which can effectively improve the efficiency of the application and the chance of successful account opening.
If customers need to open a Hong Kong bank account or have related inquiries, please feel free to contact us.
(Some pictures are taken from the public Internet. If there is any copyright, please inform us to delete them)
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[ 2024-5-24 ]
In a quiet market, earn 10 million dollars
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In recent days, the economies of China and Hong Kong have been sluggish and lack vitality. But last week, our company suddenly received good news: a customer who applied for offshore tax exemption, after five years of negotiations with the tax bureau, finally obtained the approval of the tax bureau to completely exempt Hong Kong profits tax and completely refund the previous prepaid tax approximately more than 10 million dollars. In other words, our company earned more than 10 million dollars for this client this year.
According to the practice of the Hong Kong Inland Revenue Department, they will not admit the "you win, I lose" outcome. They only say that there is no need to modify the tax assessment for the original year, which means that they agree with the tax filer's original method of filing the tax return.
In this case, our client from China who set up a Hong Kong company to run mass merchandise. According to tax regulations, the business is not operated in Hong Kong, so the application does not need to pay Hong Kong profits tax. But of course the tax bureau is not so easy to give in. It insists that the company must pay Hong Kong profits tax and raises many reasonable or even unreasonable questions, asking the customer to explain. After five years, our company answered the questions raised by the tax bureau one by one, and finally succeeded.
This case illustrates that as long as you make a good tax plan and then implement it effectively, you can effectively reduce taxes.
Our company has many years of experience in handling tax work and has successfully applied for exemption or reduction of Hong Kong profits tax for many clients. If you have any tax issues, please feel free to contact us.
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[ 2024-5-17 ]
Mural in the accountant firm
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There are murals in Dunhuang, and there are murals in the accounting firm?
Friends who have been to our company should have noticed that there is a mural in the large conference room of our company, and the mural changes frequently.
In fact, the mural is a small piece of glass on the wall of the conference room. It is a sharing area for employees, allowing colleagues to use their own creativity to share work experiences and feelings with cute pictures and vivid words, and encourage each other. Attached are some of the murals that have appeared for everyone to enjoy.
Accounting work is a relatively traditional job. However, our company hopes to use non-traditional working methods to effectively solve business problems for customers, such as: accounting, auditing, taxation, business structure, financing, etc., and use positive methods and innovative thinking to help customers solve problems. Business issues. Therefore, murals are a good place to encourage innovation and practice thinking.
Our company's service team is not only experts in auditing, taxation, accounting, finance, financing and company secretaries, but also creators and painters. They are committed to solving various business needs for customers and achieve our company's "Growing with Customers" , share the results” goal.
If you have any business questions or need assistance, please feel free to contact our company at any time. If you have time, you are welcome to visit our company and view the murals.
(Some pictures are taken from the public Internet. If there is any copyright, please notify us for deletion)
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[ 2024-5-9 ]
Not fear of liquidation?
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There is a restaurant in Hong Kong, which once had more than 20 branches, had several branches in the New Territories, was forced to liquidate and close down. But why can other branches continue to operate? Is it a scam? Are there any risks in continuing to do business with them?
Let me first explain why one branch is liquidated while other branches can still continue to operate. The reason is simple. Each branch is operated by an independent limited company, rather than one company opening several branches. legally, each limited company is an independent legal person. When problems occur, it will not affect other companies with the same directors or shareholders. So strictly speaking, it is not a "branch". This kind of arrangement is also a very common arrangement in modern business. Its function is to establish a firewall. When a fire breaks out in one place, other places will be protected from involvement. Advantages: Risk isolation; Disadvantages: Each company has operating expenses every year, so the cost increases. However, the annual cost of each independent limited company can be as low as 10,000 to 20,000 dollars, and the relative risk of loss can be said to be negligible.
On the other hand, are there any risks in continuing to trade with counterparties whose "branches" have been liquidated? As a consumer, there is certainly no risk in paying for one meal. But as a supplier, you need to make it clear whether you are supplying an independent "branch" or the head office. An independent "branch" can be liquidated at any time, but the head office is of course more protected. Therefore, when making a deal, you must conduct due diligence with the other party and know the other party’s details.
Our company is a business services company that provides multiple services. It is handled by accountants. We have rich experience in providing customers with various appropriate structures or assisting in due diligence to reduce risks. If you have any inquiries, please feel free to contact our company.
(Some pictures are taken from the public Internet. If there is any copyright, please notify us for deletion)
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[ 2024-5-3 ]
How much tax will you pay this year?
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The tax paid this year will definitely be higher than last year, because the economy will return to normal and income should increase; on the other hand, the tax relief will be reduced from 6,000 dollars last year to only 3,000 dollars this year.
The Hong Kong Inland Revenue Department has issued 2.44 million personal tax returns for 2023/24 on May 2nd, and they must be completed and returned to the tax bureau within the specified time limit. Now is the time to calculate your tax, or to make a tax plan quickly to reduce your tax expenses in a legal way.
Our company has compiled an excel sheet, which is a simplified version of the 2023/24 salary tax payable calculation sheet, which can help calculate the salary tax payable this year. You only need to fill in your relevant figures in the yellow boxes to calculate the salary tax payable for this year.
This excel sheet can also be applied to self-employed people, just enter the business profit (unlimited company) into the "Income" box.
Excel calculation sheets can be found on this post down below. Or you can contact our colleagues to provide it. If you find the calculation sheet helpful, please forward it to your friends.
Please note that this is just a simple version of the calculation sheet and the calculation results are for reference only. The calculation sheet may not be able to handle some more complex situations (such as other tax exemptions or expenses, etc.). For accurate calculation of the tax burden payable, please seek professional advice.
If you have a more complicated situation, you can fill in the information in the attached form and give it to our company to calculate it for you.
(Some pictures are taken from the public Internet. If there is any copyright, please notify us for deletion)
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[ 2024-4-25 ]
Saving taxes in a legal way
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On March 28, our company issued a post talk about a 65-year-old taxpayer who concealed and underreported his rental income, thinking that he could hide it by using other people’s bank accounts to collect rent; he also falsely reported the tax deduction for residence interest; when the tax bureau making inquiries, he even provided false statements and was prosecuted by the tax bureau. The court made a ruling last week and found him guilty of 12 counts of tax evasion. He was sentenced to seven months in prison and a fine of 20,000 dollars for each charge, a total of 240,000 dollars.
The penalty in this case is actually very light, because the maximum penalty for each charge is three years in prison and a fine of 50,000 dollars. That is, the maximum penalty in this case is 36 years in prison and 600,000 dollars fine.
In fact, the underreported tax involved in this case was only 550,000 dollars. The light sentence would have been seven months in prison, and the severe sentence would have been 36 years in prison. It was definitely not worth the gain.
I have said it many times, tax saving in a legal way.
Once again, there are many ways to save taxes, but the following tax saving tips must be followed:
1. Doing business is long-term, and you must file taxes in a legal and reasonable way;
2. Recognize that paying taxes is the responsibility of citizens and they must pay appropriate taxes;
3. Find a qualified accountant to assist in filing taxes or handling questions from the tax bureau.
Our company is a licensed accounting firm in Hong Kong with more than 30 years of experience in handling various tax matters. Our aim is to "grow together with our customers and share results".
If you have any tax issues, please feel free to contact our company.
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[ 2024-4-19 ]
How to set up a charity?
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Have you ever thought about setting up your own charity but feel like it is something out of reach?
Recently, many friends have inquired about the tax exemption under Section 88 of the Inland Revenue Ordinance (referred to as 88 license). It shows that Hong Kong people are eager to involve in charity work but don’t know how to start.
In fact, Hong Kong actually does not have a definition or license of the so-called "charitable institution". However, under Section 88 of the Hong Kong Inland Revenue Ordinance, charitable institutions and trusts of a public nature are exempt from paying tax. Therefore, most people think that organizations that qualify for tax exemption under Section 88 are charities.
To establish a charity, a "guarantee company" is usually used to apply to the Hong Kong Inland Revenue Department. The main criteria for approval by the Inland Revenue Department are to see whether the applicant's purpose is to perform "charitable" work, and whether it is satisfied that it will actually perform the described charitable work and not for other purposes. Therefore, it is necessary to review the articles of establishment of the organization, the background of the management personnel, relevant activity plans, etc., and the procedures are relatively complicated. In addition, the tax bureau’s requirements for licensing have become increasingly strict in recent years, and it is not easy to successfully obtain an approval.
Our company has a lot of experience in successfully applying for 88 licenses. Clients only need to provide information about the purpose of establishment, the organization's activity ideas, etc., and our company can follow up the entire process. Starting from the establishment of a guarantee company, we assist in formulating tailor-made company articles of association, to preparing the required information for applying and obtaining the 88 license as soon as possible, so that your charity dream can come true earlier.
Regarding the benefits of establishing a charity and other application requirements, our company will publish more about this in the future.
If you are interested in setting up your own charity organization and realizing your dream of promoting public welfare, please contact us.
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[ 2024-4-11 ]
Does a company have to submit audited accounts when filing tax returns?
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Does a company have to submit audited accounts when filing tax returns?
The Hong Kong Inland Revenue Department has issued 220,000 profits tax returns for 2023/24 on April 2. Many friends felt very confused and worried after receiving it, because the first page of the tax return stated that supporting documents (including audited accounts) were "required" and raised many questions. Our unified answer is as follows:
1. Question: If the company is not operating, does it need to provide audited accounts?
Answer: Starting from 2022/23, unless the company has been registered as a "dormant company" in the Companies Registry in accordance with Section 5 of the Companies Act, no matter whether it has operations or the amount of turnover, it needs to be audited and submitted together with the audit account.
2. Question: The company has not been operating and has not been audited many years ago. Does it only need to make an audit account?
Answer: According to Articles 379 and 394 of the Hong Kong Companies Ordinance, all Hong Kong limited companies must submit an audit report every fiscal year. Failure to comply will result in a fine of HK$30,000 or imprisonment for two years. Therefore, the audit must start from the year of establishment or the last audited year, and accounts and audits must be done every year until the year in which tax returns are required;
3. Question: Why do we need an audit now? Not needed before?
Answer: In fact, it is required by company law to conduct audits every year. In the past, the tax bureau only enforced it loosely, but now it must enforce it strictly. If you didn't do it before, it was "stealing the chicken". Now if you have to make up for it, it's time to "pay it back";
4. Question: It has been a long time and many of the information are incomplete. What should I do?
Answer: It is the responsibility of every taxpayer to keep accounting information for at least 7 years. But understand that it is normal for some data to be lost over time. You can collect relevant information as much as possible, such as bank statements, transaction records, etc., and process it as much as possible;
5. Question: It may be necessary to perform accounting audits for several years or even ten years at a time, which will take a long time. Can I use this as a reason to request an extension to submit my tax return?
Answer: No. If there is no tax representative, the tax return together with the audited account needs to be submitted within one month after the tax return is issued. If you hire a tax representative, you can apply to defer submitting your tax return until August or mid-November. Therefore, please prepare relevant information for audit as soon as possible.
Our company deeply understands our customers’ anxiety about the above issues. Our company will try our best to help customers solve the problem in terms of time, cost and compliance. If you have any tax filing needs or questions, please feel free to contact our company at any time.
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[ 2024-4-5 ]
"CaringCompany" Enterprise
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Edward So & Company Certified Public Accountants was awarded as a "Caring Company" and was allowed to use the Caring Company logo.
The "Caring Company" program is organized by the Hong Kong Council of Social Service. Its purpose is to promote corporate social responsibility, establish a platform for mutual assistance and care, link business cooperation, support disadvantaged groups in distress, and promote the sustainable development of society.
Last year, our company participated in a series of charity and community work, and was nominated by relevant charitable organizations and recommended companies to participate in the Business Exhibition. Fortunately, we were recognized and received the Business Exhibition's Care Logo. In addition to being a symbol of recognition, the logo also marks the results of our company's corporate social responsibility.
To achieve corporate social responsibility, participating in charity work and regional services is certainly one way. However, being able to do a good job in one's own business, providing a good working environment for employees, providing effective services to customers, helping customers develop their businesses, increase profits, and promote social and economic development are also important manifestations of corporate social responsibility.
Our company has always been adhering to the purpose of growing together with customers and sharing results. Through our diversified and practical work, we help customers develop their business and implement our company's corporate social responsibilities.
We welcome all friends who are interested in growing with us at work and shouldering corporate social responsibilities with us.
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[ 2024-3-28 ]
I have said it many times, don't use illegal way to save taxes.
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Please forward this article to your friends, customers, and business partners. They will definitely be very grateful to you and will become your better friends, better customers, and better business partners, because you can help them avoid duplication. Repeated mistakes avoid financial losses and mental stress. But they may also have a negative reaction: "Why didn't you tell me earlier?"
Last week, the Hong Kong Inland Revenue Department announced that a 65-year-old taxpayer concealed and under-reported his rental income, thinking that he could hide it by using other people's bank accounts to collect rent; he also falsely reported the tax deduction for residence interest; when the Inland Revenue Department made inquiries, he even provided False declaration, prosecuted by the tax bureau. In the end, the court ruled that he was guilty and is now awaiting sentencing.
Tax evasion and tax concealment are both illegal and criminal offenses with serious consequences. Upon conviction, each charge carries a maximum penalty of three years' imprisonment and a fine of HK$50,000, plus a fine equal to three times the amount of tax undercharged, with a retrospective period of seven years. For underreporting caused by fraud or deliberate tax evasion, the retrospective period can be as long as 10 years.
There are many ways to save taxes, but you must abide by the following tax-saving tips:
1. Doing business is long-term, and you must file taxes in a legal and reasonable way;
2. Recognize that paying taxes is the responsibility of citizens and they must pay appropriate taxes;
3. Find a qualified accountant to assist with tax preparation.
Our company is a licensed accounting firm in Hong Kong with more than 30 years of experience in handling various tax matters. Our aim is to "grow together with our customers and share results".
If you have any tax issues, please feel free to contact our company.
(Some pictures are taken from the public Internet. If there is any copyright, please notify us for deletion)
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[ 2024-3-22 ]
One thing that happened every year - tax filing
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The 2023/24 tax season is about to begin, and the tax bureau will start to issue tax returns next week.
In the 2024/25 Budget Report, the Financial Secretary made the following proposals:
1. Reduce 100% of profits tax, salaries tax and personal assessment for the year of assessment 2023/24, subject to a cap of $3,000 per case ($6,000 in 2022/23);
2. Starting from 2024/25, a two-tiered standard tax rate system for salaries tax and personal income tax will be implemented. For those with an annual income of more than 5 million dollars, their first 5 million dollars of income will continue to be calculated at a 15% tax rate. For those with an annual income of more than 5 million dollars, the tax rate will be 16%
The new measures will increase the tax burden on taxpayers. Therefore, tax planning must be done to cope with the increased tax burden. To make a good tax plan, you need to find a licensed accountant who is experienced and sincerely wants to help you. He can recommend the most appropriate tax filing and tax payment plan according to the different situations of the client; instead of filing taxes randomly and not paying taxes.
Our company is a licensed accounting firm in Hong Kong with more than 30 years of experience in handling various tax matters. Our aim is to "grow together with our customers and share results". If you have any tax issues, please feel free to contact our company.
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[ 2024-3-15 ]
Hong Kong Famous Brand Award
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Accountants Edward So is honored to receive the "Hong Kong Famous Brand Award" and accepted the award a few days ago.
What is a brand? What brands does our company have?
"Brand" means a symbol of a product or service, including goodwill, products, corporate culture and overall operational management. It is the sum of the overall competitiveness of an enterprise. It is also the uniqueness of an enterprise that is visible to the outside world.
The uniqueness of our company is that we put the interests of our customers first, provide customers with feasible and useful advice in a down-to-earth manner, and provide cost-effective services. Looking around the market, there are few similar ones, so it is a "brand".
Is our company famous? Our company has been operating in the industry for more than ten years and has accumulated a large number of customers or friends, so it can be regarded as a fairly well-known company.
An award does not actually represent any honor, it just means that our work has been initially recognized by the public. We know that there is no best, only better. We will uphold our company's mission: "Grow with customers and share results", and continue to solve business problems for customers, especially in accounting, auditing, taxation and set up corporate, with our professional work ethnic and provide cost-effective fees.
If you encounter any problems or bottlenecks in business, please feel free to contact our company to help you solve the problem.
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