Does a company have to submit audited accounts when filing tax returns?
2024-4-11
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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