1. When should a limited company submit the Profit Tax Return once incorporated?
Every limited company will receive their first Profit Tax Return from the Inland Revenue Department (IRD) 18 months once incorporated. Then the Profit Tax Return will be issued in April (normally) every year thereafter.
2. How to submit the Profit Tax Return for a limited company?
The accounts of a limited company shall be audited by a Certified Public Accountant before submitting to the Inland Revenue Department (IRD) together with an auditor's report and Profit Tax Return.
3. How to manage the tax payable?
Once the Profit Tax Return is submitted to the IRD, a notification of tax payable will be issued by the IRD officer to the limited company. The company shall then pay the tax before the due date.
4. What will be the consequence for an overdue tax payable?
A 5% of surcharge will be applied to the tax payable for the overdue payment. Then an addition of 10% (the first 5% included) surcharge will be applied to the tax payable after 6 months of overdue. A further penalty may also be applied by a district court from the Inland Revenue Department.
5. Does every limited company have tax payable to the IRD?
Not necessarily. However, all limited companies shall submit a Profit Tax Return every year for IRD assessment on the tax payable.
6. In what situation does a limited company has to pay Profit Tax?
A Profit Tax shall be paid by a limited company when a profit is generated in the business.
7. What will be the consequence of not submitting a Profit Tax Return?
A beginning penalty of few thousand dollars or above may be applied if a Profit Tax Return is not submitted before the due date. A further fine may also be applied by a district court from the Inland Revenue Department.
8. How to manage the Profit Tax Return if it is received in the taxing period before the business of the limited company commence?
The Profit Tax Return shall also be submitted to the IRD even if the limited company has not commenced its business.
9. Does it required to submit the Employer Return for staffs who came from China?
The Employer Return shall be submitted to the IRD disregarding the nationality of the staff as long as his/her yearly income exceeds $100,000.- in th financial period of 1st April to 31st March.
10. If a limited company receives a notification of "no Profit Tax Return to be issued to the company", does it mean that the company does not need to prepare its audited account?
No. The notification of "no Profit Tax Return to the company " only means that there will be no Profit Tax Return issued actively from the IRD. However, it is the responsibility of the limited company to apply for the Profit Tax Return and submit it to the IRD with an Audited Account whenever a profit is recorded in the business. Therefore, it means that a limited company should prepare its audited account every year.