Holding Over of Provisional Profits Tax
In order to protect tax revenue, provisional tax may be charged based on current year assessable profit. On the other hand, you may apply hold over of provisional tax if the following conditions are satisfied.
Grounds for Application
You may apply for holding over of provisional profits tax if:
- Your assessable profits for the year of assessment are, or are likely to be, less than 90% of the assessable profits for the year preceding the year of assessment or of the estimated sum in respect of which you are liable to pay provisional profits tax.
Supporting documents including properly signed draft accounts covering a period of not less than 8 months should be submitted together with the application. - The amount of any loss brought forward for set off to that year of assessment has been omitted or is incorrect.
Time limited for Application
Your application for holding over of provisional tax should be in writing and lodged to the Inland Revenue Department not later than:
- 28 days before the due date for payment of the provisional tax, or
- 14 days after the date of issue of the notice for payment of the provisional tax,
whichever is later.
If the provisional tax is payable by two instalments and the first instalment has been settled by the due date, an application for holding over of the whole or part of the second instalment may be made subject to the prescribed time limit and grounds for application.
