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A Detailed Guide On Employer’s Tax Return Hong Kong

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employer tax return Hong Kong

Being an employer in Hong Kong is more than just claiming ownership to a company. The government also require you to file and submit certain documents. The Employer Tax Return is a legal requirement by the Hong Kong government. Employers are responsible for producing these returns annually. But how does the entire process work? This guide will show you everything you need to know about the employer tax return.

What is an Employer’s Tax Return in Hong Kong?

An Employer’s return is a disclosure requirement by the Hong Kong Inland Revenue Department (IRD). This return refers to an annual report about the salary and benefits offered to employees. This return, also known as BIR56A and Form IR56B, is requested from all businesses in April every year. The Employer’s return is a way to allow the IRD access to the salary tax liabilities of employee. It will access all tax liabilities between 1 April and 31 March.

What Information Must Be Disclosed?

An employer’s return should contain the right information before you sign and submit it. This are the information that should be included in the Form IR56B of the employer’s return;

  • Employment details – nature of employment (part-time or full-time)
  • Personal details – marital status, residential address, identity card, passport number, issue location, and passport number.
  • Name of employee
  • Remuneration amount – whether foreign or domestic currency. It should also include salary paid outside Hong Kong.
  • Details on any additional non-cash or fringe benefits, such as accommodation, share or stock options, vacation allowances, etc.
  • Changes made to the information listed above

On the other hand, the BIR56A form will contain information about;

  • The company’s name
  • The company’s registered business address
  • The name of whoever compiled the company’s remuneration and pension reports
  • The number of IR56B forms submitted
  • The chosen format for submission

Salaries Information to be provided by Employers

Employers need to disclose the following items of the remuneration provided to their employees.

  • Bonus and benefits
  • Cash allowances
  • Back pay, arrears of pay, contract gratuities, and deferred pay
  • Commission
  • Educational benefits and costs
  • Holiday allowances
  • Leave bonus and benefits
  • Housing allowance
  • Income earned from overseas engagements
  • Contract termination settlements
  • Employee salary
  • Share awards and share options
  • Mandatory Provident Fund

How Employer’s Tax Return Filings Are Submitted In Hong Kong

So, what’s the process for submitting an employer’s tax return? Keep reading to find out.

The Employer’s Return will be sent out on the first working day of April. The company is expected to prepare the payroll details, personal information, and other relevant details for the year (1 April – March 31). You’ll need to update this information if you’ve prepared the employer’s return during the previous year.

All employers are expected to submit the returns form within a month after it is sent out. There are several ways to file an employer’s tax return. When you’re done compiling all the necessary details, the next thing to do is decide on the mode of submission. Companies may choose to submit their tax return online, through a hard copy form, or through a mixed method.

Online submission

The first step to submit an employer’s return online is to create an account on eTax. You’ll need to employ a digital signing function to complete your online submission. Authorized signers are allowed to create an eTax account. They include;

  • The sole proprietor or owner of the business
  • Precedent partner
  • Company director, manager, secretary or provisional liquidator for a corporation
  • The principal officer for a body of persons

You may upload your BIR56A and IR56B forms individually, or you could create a data file to upload them at once. Employers with more than 800 staff can upload several data files. You can create a data file with IR56 Forms Preparation Tool, IRD IR56B Software, and Pre-approved Self-developed Software.

Hard Copy Submission

Employers may physically submit forms issued to them by the IRD or download them from their website. However, these forms should be signed by the company director, secretary, liquidators or managers. If there are any employees that fall under Note 1 (a), you may need to specify them. Employers should also specify the number of forms that apply to these people.

Mixed Submission

You may choose to submit a soft copy of the IR56B stored on a CD-ROM/DVD/USB. This soft copy will be accompanied by a signed BIR56A and control list. To get a control list, any staff chosen by the employer can upload data files to the IRD. After the upload is completed, a QR code will be created along with a control list and transaction reference number. The company’s authorized signatory would have to sign and submit the list.

How Can We Help?

Running a company is quite tough. There are usually many activities to look out for, and many employees to control. Most Hong Kong employers have their hands full with trying to organize the affairs of their institution. However, they still have to ensure that they submit the Employer’s returns to the IRD. Failure to file their returns as at when due may result in sanctions from the Inland Revenue Department.

If you’re looking to hire a professional company to help with your Employer’s returns, Premia TNC is a top-rated alternative. We are a professional business consultancy firm with an exclusive list of chartered accountants, secretaries, etc. We hire the best professionals to ensure our customers get the best input.

Our job is to ensure that you can easily handle the different aspects of your business. As a service provider that has partnered with several brands in Hong Kong, we understand everything it takes to file Employer returns. You can hire us to help you handle the entire process. Our experts will help you compile payroll information, and have it at your fingertips. We’ll help you gather all the essential details, and aid your submission. We’ll also issue reminders to ensure you don’t miss the preset deadlines.

Is it possible to extend the submission deadline for an employer's return?

You’re expected to submit the employer’s return within a month. If an employer is unable to meet this deadline, they’ll need to apply for an extension with the IRD. The IRD reserves the right to honor or reject the application.

Are there penalties for missing the submission deadline for the employer’s return?

There are strict penalties for those who miss the submission deadline. If you fall short of the deadline, you’ll have to pay HKD 10,000.