National toll free hotline:
400-711-2005
What is Nil tax filing?
? Common scenario of using Nil tax filing (Simple tax filing) is when a company has "NO BUSSINESS COMMENCED" since incorporation;
? When doing a tax return filing, taxpayer may adopt a “simple” approach;
? This commonly seen approach cannot be recognized as the “official” approach and our company always recommend an "Ordinary Tax Filing";
? This filing does not exempt a company from the duty of keeping proper business record, preparing account and audit work.
Result of Nil tax filing
? From experience, tax department usually accepts such declaration if there is no contradictory info;
? However, “usually accepts” does not imply this is the “official” way and making the case “final” and “conclusive”;
? Similar to many tax department in the world, HK tax department can always re-open a tax file, especially when there is contradictory and suspicious info;
? “Usually accepts” also does not make a company exempt from its duty of proper business record keeping and exempt from preparing audit report.
Important
ü Hong Kong tax department has right to request submission of financial statement and audit report;
ü Financial statement and Audit report should be prepared even a taxpayer declares "NO BUSSINESS COMMENCED".
What is the condition of "No business commenced"?
No business commenced
? Generally, there are 2 interpretation:
1. Totally no transaction happens under a company name, no matter it is administrative expenses, investment, or income items
2. No income item happens under a company name
? Interpretation in above (2) is narrower than (1), and is commonly adopted for tax treatment purpose;
? However, “commonly adopted” is not “officially adopted”, considering different business nature of companies;
? Therefore, to avoid mis-understanding, the safest approach is to adopt (1) and follow the duty of keeping proper proper business record and auditor report
Ordinary tax filing
Ordinary tax filing is the “official” tax filing approach, which means below documents need to be submitted :
ü Financial Statement;
ü Auditor Report;
ü Tax Computation.
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