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Should You Hire A Tax Representative For Your Hong Kong Company?

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tax representative hong kong

Running a business in Hong Kong is no easy task as business owners are usually caught up with various corporate matters, including accounting and taxation processes. You’ll have to tackle several challenges and make important decisions for your firm’s growth.

That’s why many business owners focus on methods to help them increase their focus. They want to spend enough time thinking about the crucial aspects of the business. And that’s where a tax representative Hong Kong comes in.

You can hire a tax representative Hong Kong to help with your firm’s taxation. The role of a tax representative Hong Kong differs from what’s found in other countries. Generally, he operates on behalf of a client company.

This professional will ensure that your firm complies with tax legislation and deadlines. But is it worth hiring one for your Hong Kong company? Keep reading to find out.

What Is A Tax Representative?

Before learning whether to hire a tax representative Hong Kong or not, the first important detail to treat is the meaning of the term. So, who’s a tax representative Hong Kong? The role of a tax representative Hong Kong is defined by Inland Revenue Ordinance Cap 112.

This regulation defines a tax representative as an individual authorized to act on behalf of another entity in tax-related matters. These activities may include tax filings, etc. The tax representative will help your company meet tax returns filing requirements.

They’ll also help with tax planning and offer advice on tax-related affairs.

What Is The Difference Between Tax Representative, Tax Agent, And Tax Accountant?

You’ve probably heard the terms tax representative, tax agent, and tax accountant. You may have wondered if they mean the same thing or if there’s any relationship between them. Let’s take a closer look each role and their responsibilities.  

 As mentioned earlier, a tax representative Hong Kong is any individual authorized to represent an entity on tax-related issues. According to this definition, a tax representative is paid to represent entities that could be people or firms.

A tax agent is the term that describes professionals that represent taxpayers, while tax accountants work with companies.

Tax Agent

A tax agent is any individual who is licensed to handle tax matters for taxpayers (individuals). He or she will relate directly with government authorities on behalf of their clients. They can also advise clients on the best action to take.

However, tax agents can represent more than one taxpayer at a time.

Tax Accountant

A tax accountant is an individual who specializes in helping companies handle any tax-related issues. They prepare and execute tax returns according to accepted standards.

These professionals are usually vast in local taxation laws. They have the prowess and expertise to help you increase how much you save and avoid falling victim of sanctions and penalties.

Certain tax accountants hold in-house positions with the firms they serve. You’ll find others in accounting firms hire on a contractual basis. It’s not uncommon to find tax accountants working under the employ of government agencies and insurance companies.

Furthermore, there are also self-employed tax accountants.

During the tax season, most professionals in this category are busy. When the season is over, they advise management on tax-related decisions. In addition, they perform audits, offer advice on future investments and assets, and create detailed financial plans.

Other duties of a tax accountant include:

  • Check through financial statements: These professionals will go through your books to determine the accuracy of your tax returns. They’ll make sure all your books are compliant with government regulations.
  • Create budgets: Budget creation is a primary responsibility of tax accountants. They’ll help your firm save money by sticking to a budget. They determine profitability by planning expenses and the expected revenue.
  • Organize financial records: Tax accountants understand the importance of properly organizing your finances. It’s their duty to maintain proper organization of records.
  • File taxes: Tax accountants will help you determine how much worth of taxes you should pay.

Responsibilities Of A Tax Representative

So, what are the responsibilities of a tax representative? Tax representatives perform myriad duties for whatever entities they are involved with. While each entity varies from others, the responsibilities are quite similar.

The full range of services you can get from a tax representative Hong Kong include:

  • Representing your entity and communicating with the IRD on your behalf. Not all business owners have the technical acumen to communicate clearly with the IRD. Some of the terms need to be simplified and may hamper communication.
  • Creation and tax returns filing to the IRD. This is the major role of a tax representative. They calculate how much tax a company is expected to pay yearly, and file it to the Inland Revenue Department.
  • Attending to the IRD’s letters, correspondence, and inquiries. A tax representative Hong Kong will also be responsible for opening and interpreting other correspondence from the IRD. Because of their deep understanding of how the IRD works, they can understand their correspondence with little or no hassle.
  • Working on IRD’s field audits and investigations
  • Seeking approval for IRD’s advanced tax rulings. Your tax representatives can help you process advanced tax rulings. They’ll use their in-depth knowledge of Hong Kong tax laws to seek advanced deductions from their revenue.
  • Seeking deadline extensions for tax returns filing and inquiries. If you require any extensions for tax filing or have any inquiries for the IRD, your tax representative will handle it.
  • Making complaints about tax assessments/estimated tax assessments gotten from the IRD. If your company has recently suffered from any challenges with the IRD, the tax representative can make complaints on behalf of the entity. The professional will serve as the intermediary between the entity and the IRD.
  • Attending to questions about your entity’s tax compliance and position. If the IRD has questions about the tax compliance of your business, your tax representative will respond to them.
  • Creating a custom tax strategy minimizes the entity’s liability and promotes efficiency. A tax representative can design a unique strategy to determine how your annual tax liability will be settled. The expertise of your tax representative will determine how much
  • Preparing sole proprietorship and partnership financial statements and computations, including balance sheets, statements of profit or loss, and profit tax calculations. Depending on the nature of your organization’s activities, you may require that your tax representative also prepare your primary books of account. When your tax representative is in charge of your financial records, it’s easier for the professional to determine your overall tax liability.

Benefits Of Appointing A Tax Representative

Now that you’re familiar with the meaning of a tax representative Hong Kong, it’s time to learn what you stand to gain from hiring one for yourself.

The following are the benefits of appointing a tax representative Hong Kong:

1. Save Time On Calculating Taxes

It takes plenty of time to compute taxes. This lengthy process may include checking for errors, gaining the right forms, and figuring out tax deductions. As a result, it would be a daunting task for your in-house employees to handle while staying abreast of other affairs.

The task size may even increase further, depending on the scale of the company’s affairs. Having a tax representative will take the heavy burden off your employees. You won’t have to waste time on tax-related activities that will not earn you revenue.

2. Allow You To Determine Tax Preparation Fees

When calculating a business’s expenses, most firms find it difficult to determine how much has been spent on tax preparation. That’s because such activities are handled by in-house staff and are difficult to distinguish.

By hiring a tax representative Hong Kong, you can easily determine how much you’re spending to prepare your financial records for annual taxation.

3. Eliminate Errors

If you task in-house employees with handling tax-related matters, the chances of an error are quite high. It doesn’t matter how self-assured the in-house individual or team is.

There’s always a lesser probability of an error occurring when you hire a sole representative to handle this task on your behalf.

A tax representative is experienced with taxation legislation and has probably repeated the same process for several companies. Therefore, they know what to do to get the right results.

4. Assist With Auditing

Auditing a company’s financial records can be lengthy and feature several technicalities. That’s why you need a tax representative Hong Kong. This professional will help you handle the paperwork and represent you. Your auditing will also be considered more reliable by government authorities.

How Our Accounting and Taxation Services Can Help You

Every company must pay taxes. As a result, the tax preparation process is crucial to the legal compliance of commercial entities. But determining a firm’s taxation and filing may be too much responsibility for your in-house staff.

Handling your firm’s taxes can be plenty of work. The process involves checking through financial records, calculating tax deductions, and checking if the firm is eligible for discounts. These tasks may take hours.

Small and medium businesses with a limited number of employees may struggle to complete them. That’s where a tax representative comes in.

A tax representative will handle tax-related matters and save the time and effort of your in-house employees. You’ll need all the additional time on their hands to generate revenue and satisfy customers.

Premia TNC is a reliable tax representative Hong Kong with all the resources to partner with your organization. We have a group of professionals who are experts in Hong Kong taxation legislation. As a result, they know how to keep you on the right side of the law. Premia TNC has worked with numerous clients of different sizes.

There are many reasons why anyone should hire Premia TNC. Hiring this firm as a tax representative is more cost-effective than letting your in-house staff handle it. Also, you can rely on the expertise of our professionals to handle your taxation.

All our professionals are committed to only one task – handling your taxation innovatively.

Premia TNC is a business consultancy firm with a long list of services that it uses to support the growth of companies. Asides from these taxation services, we also offer accounting, secretarial, work visa, legal compliance, and incorporation services.

Tax Representative Hong Kong – Frequently Asked Questions

1. Can an authorized tax representative file eTax on my behalf?

Every business owner is expected to pay their taxes. While a tax representative can file your returns on your behalf, eTax is solely your responsibility. You’re not authorized to share the details to pay for your eTax with any individual or entity.

2. Who is a tax representative?

A tax representative is an entity that has the right experience, credentials, hands-on experience and licensing to handle taxation for another entity. A tax representative may serve either individuals or companies. This professional is expected to stay up to date with annual tax laws.

3. What are the qualities of a good tax representative?

Whether a tax representative is good depends on the features or qualities, they have been able to master during their career.

Some of the most interesting features in any tax representative include: attention to detail, creativity, problem-solving skills, confidence, smooth communication, etc.

4. What should every business look out for when hiring a tax representative Hong Kong?

No doubt, a tax representative Hong Kong is crucial to the success of your business. You’ll find several alternatives available to your entity whenever you decide to hire one. As a result, it can be tough to settle on a final choice.

To hire a tax representative, you must ensure they have the right certifications. You’ll also need someone with the expertise to understand your financial goal. Furthermore, a tax representative is available all year round.

5. Why should I hire a tax representative?

No doubt, a tax representative is designed to make your business easier.

They will work with business owners on tax-related matters, including filing annual returns and advise on future investments and assets. Hiring a tax representative is also a cost-effective way to handle tax preparation.