One year has passed since the epidemic, and the work of the tax bureau has gradually returned to normal.
The number of tax surcharge notices and tax recovery notices issued by the tax bureau this year has increased significantly compared with the previous year. Among them, there were as many as 250,000 tax recovery notices that were levied with a 5% surcharge due to late payment of taxes, an increase of 22% from the previous year.
Taxpayers have to deal with this "active" work only by paying taxes on time. Those who fail to pay taxes on time will generally be levied a 5% surcharge; if the tax arrears exceed 6 months, a further 10% surcharge will be levied on the total amount owed. The Inland Revenue Department can even require employers, banks, etc. to directly withhold taxes without prior notice, or initiate legal proceedings to prohibit tax defaulters from leaving Hong Kong, or even apply for bankruptcy/liquidation, etc. Therefore, the consequences of owing taxes can be severe.
Most salaries tax, profits tax, etc. are due in January. To avoid the above consequences, please remember to pay taxes on time. If the expected income in 2023/24 decreases by more than 10% compared to the previous year, you can apply for a deferment of the corresponding prepayment tax, but the application must be submitted one month before the tax payment date.
If you want to apply for reduction or exemption of prepaid tax, or if you want to legally reduce your tax burden through tax planning, please contact us.
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