Bookkeeping & Tax

Our bookkeeping and tax service covers three areas:

• Bookkeeping - monthly and annual accounting, financial statement preparation (balance sheet and P&L), ledger management, bank reconciliation, document organisation and electronic filing
• Tax - corporate profits tax returns, employee salary and MPF tax filings, tax consultation for individuals/unlimited/limited companies, tax filing extensions
• Corporate actions - share transfers, company deregistration (limited and unlimited)

Since April 2023, the Inland Revenue Department removed the exemption that let small companies with gross income under HK$2,000,000 skip submitting audited financial statements.

Even if the company had no business activity for the year, unless it has formally registered dormant status, it must still submit an audited financial statement together with its profits tax return. The old practice of an informal 'nil filing' without an audit no longer applies in the general case.

Unlimited companies are exempt from the statutory audit requirement, saving roughly HK$3,000 to HK$8,000 a year in audit fees — one of the main advantages of the unlimited structure. They still need to file a profits tax return every year and keep accounting records for at least 7 years.

Unlimited companies also pay a lower profits tax rate than limited companies:

• First HK$2,000,000 of profit: 7.5% (unlimited) vs 8.25% (limited)
• Above HK$2,000,000: 15% (unlimited) vs 16.5% (limited)

Hong Kong law provides the right to formally object to a Profits Tax assessment believed to be incorrect, but the timeframe is short — a written objection stating the grounds must generally be lodged within one month of the date shown on the assessment notice. Failure to meet this deadline generally forecloses the usual appeal route, so promptness matters more than having every supporting document prepared. We prepare and file objections on behalf of clients within this timeframe as part of the bookkeeping and tax service.

Pricing is based on the company's annual turnover and transaction volume, not a single flat fee — a dormant or low-turnover company is priced lower than one with substantial, frequent transactions.

If you're on Chinglink's limited company Complete package, the first year of bookkeeping, audit placement and profits tax filing is already included in the package price, but only while the company is dormant or has low turnover — above that, we provide a tailored quote.

Contact us and we'll quote based on your company's actual turnover and transaction volume.

Under section 5 of the Companies Ordinance, a company can pass a special resolution to register as dormant, which under section 447 exempts it from preparing audited financial statements and filing tax with an audit report attached.

This exemption is not automatic — the company must proactively register dormant status with the Companies Registry, and most inactive companies haven't done this, so the general rule still applies and audit/filing fees are still due each year.

If your company has been inactive for a long time, rather than paying several thousand dollars a year just to stay compliant, it may be worth considering deregistration instead, which we also offer.

A Hong Kong company is subject to several separate deadlines rather than a single combined date: the Annual Return (NAR1) must be filed within 42 days of each anniversary of incorporation; the Business Registration Certificate must be renewed annually; and the Profits Tax Return is issued by the Inland Revenue Department each year, with the actual filing deadline depending on the company's financial year-end and the extended filing arrangements its tax representative uses with the IRD. We track each of these deadlines for our clients and file in advance of them — missing any one results in escalating penalties, not merely a reminder notice.

Yes, and these advantages apply automatically rather than requiring an application. Profits are taxed on a territorial basis — only income sourced in Hong Kong is taxable, so genuinely offshore profits may fall outside the tax net. The two-tiered Profits Tax rate benefits companies of any size (8.25% on the first HK$2 million, 16.5% above that). There is also no VAT, sales tax, capital gains tax, or dividend tax. In addition, Hong Kong maintains an extensive network of double taxation treaties, which is relevant where the same income might otherwise be taxed twice. None of this removes the annual audit and filing obligation — see the FAQ above.