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Taxation - Hong Kong

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FAQ as an Employer in Hong Kong

Answer
If you are an Employer in Hong Kong, you should fulfil your tax obligations. The following are the frequently asked questions on the tax obligations as an Employer in Hong Kong:

Q:
What are your tax obligations as an employer in Hong Kong?
A: Your tax obligations commences when you hire your first employee. You need to:

1.
keep sufficient payroll records for your employees for at least 7 years, such as employee’s personal particulars, nature of employment, capacity in which employed, amount of cash remuneration, non-cash and fringe benefits, employer’s and employee’s contributions to the Mandatory Provident Fund or its equivalent, employment contract and amendments to terms of employment and period of employment; and

2. report remuneration paid to employees by submitting annual Employer’s Return and/or Notification Forms.

Q:
I received an Employer’s Return (BIR56A) from the Hong Kong Inland Revenue Department. Do I still need to submit that even if I do not have any employee yet?
A:
Yes, you are still required to complete it and lodge with the Hong Kong Inland Revenue Department within 1 month from the date of the issuance even if:

1.
you do not hire any employee or;
2. the business has not commenced or;
3. the business has ceased.

Q:
Do I need to report remuneration paid to all employees on my Employer’s Return?
A:
For the year of assessment 2019/20, you have to report the employee on your Employer’s Return only if he or she is:

1.
single and paid an annual income of HK$132,000 or more;
2. married (regardless of amount);
3. a part-time staff (regardless of amount);
4. a director (regardless of amount).

Q:
What are the Notification Forms and when are the statutory period for notification?
A:
The Notification Forms need to be submitted by an employer when an employee meets following employment conditions:

Employment Condition
Form to Complete
Statutory Period of Notification
Commencement of employment
IR56E
Within 3 months
Cessation of employment
IR56F
No later than 1 month before cessation
Departure from Hong Kong
IR56G
No later than 1 month before departure

Q:
We close our accounts on 31 December. Can we file Employer’s Return in accordance with our accounting date?
A:
No, the basis period for Salaries Tax runs from 1 April of the current year to 31 March of the succeeding year. Hence, Employer’s Return must be completed for the relevant year ended 31 March.
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