Accounting and Tax Compliance for Hong Kong Companies
Every Hong Kong limited company must keep proper books of account, file an annual profits tax return, and submit audited financial statements. We handle the recurring accounting and filing work so deadlines are met without you tracking the Hong Kong tax calendar yourself.
How We Handle It
Monthly Bookkeeping
Ledger, reconciliation, management accounts.
Payroll & MPF
Salary calculations, MPF contributions, IR56 filings.
Audit Coordination
Prepare accounts and coordinate with a licensed CPA.
Profits Tax Filing
Compute and file the annual return with the IRD.
Hong Kong's Tax Position
| Item | Position |
|---|---|
| Profits tax | 8.25% on first HKD 2M, 16.5% thereafter (two-tier rate) |
| Capital gains tax | None |
| Dividend withholding tax | None |
| VAT / GST | None |
| Offshore-sourced profits | Can qualify for exemption on application |
The Annual Compliance Calendar
| Item | Typical timing |
|---|---|
| Bookkeeping / management accounts | Monthly or quarterly, ongoing |
| First profits tax return issued | ~18 months after incorporation |
| Statutory audit | Before each profits tax filing |
| Employer's return (IR56 series) | Annual, alongside payroll |
Why Bookkeeping Falls Behind
- Left until the audit is due - a year of transactions reconstructed under deadline pressure is where most errors originate
- Bank reconciliation gaps - unreconciled accounts surface as audit queries, not bookkeeping issues
- Payroll and accounting handled separately - inconsistent MPF and salary records complicate the annual employer's return
Related Services
Frequently Asked Questions
When does my Hong Kong company file its first tax return?
The IRD typically issues the first profits tax return around 18 months after incorporation, with an extended filing deadline for the first return specifically. This does not mean tax obligations start at 18 months - proper bookkeeping should begin from day one so the first filing is not a reconstruction exercise.
Can offshore-sourced profits really be tax-exempt in Hong Kong?
Profits genuinely sourced outside Hong Kong can qualify for an offshore profits tax exemption, but this requires a formal application and supporting evidence that the profit-generating activities actually occurred outside Hong Kong - it is not automatic simply because a customer is overseas. We assess whether your specific fact pattern supports a claim before advising you to pursue it.
Is an audit required even for a small or dormant company?
Yes - the statutory audit requirement applies to Hong Kong limited companies regardless of size, and even companies with minimal or no activity generally still need to file audited accounts (a dormant company has a specific, more limited filing route, but this must be formally declared, not assumed). Trading volume does not exempt a company from the requirement.
What is MPF, and is it mandatory for all employees?
MPF (Mandatory Provident Fund) is Hong Kong's compulsory retirement savings scheme, requiring both employer and employee contributions for most employees. There are specific exemptions and different rules for certain employee categories (short-term staff, some overseas hires), so we confirm applicability per employee rather than applying a blanket rule.
What happens if my bookkeeping is disorganised when the audit deadline arrives?
The audit cannot proceed on incomplete or disorganised records, so this delays the entire filing chain - audit, then profits tax return - not just the bookkeeping step. We bring records current before handing them to the auditor specifically to avoid a scheduled audit turning into an extended catch-up project under deadline pressure.
