The Year of Assessment 2007/08 will end on 31 March 2008. The Hong Kong tax filing season will commence on 1 April 2008 with the bulk issue of Profits Tax Returns and Employer¡¦s Returns. This will be followed on 2 May 2008 by a bulk issue of Individual Tax Returns.

Tax returns normally have to be submitted within one month of the date of issue but the Commissioner has continued her practice of granting extensions of filing dates for certain categories of taxpayers.

The important filing dates for 2007/08 are set out below.

In the case of companies a valid Profits Tax Return must be accompanied by signed audited accounts for the relevant basis period unless the company is a "small company", as defined, or the Inland Revenue Department (IRD) will reject the Return.

Although small companies are not required to file their audited accounts, those accounts will be the basis for the Profits Tax Return. All companies should therefore ensure that their accounts are audited within sufficient time to allow their Profits Tax Return to be submitted to the IRD by the relevant filing date.

Where a taxpayer is late in filing the relevant tax return, the Commissioner may issue an estimated assessment and/or impose penalties.

The maximum penalties under Section 82A IRO can be 300% of the tax due. In practice, penalties for late submission of a tax return are normally charged in the range of 10% to 50% of the tax undercharged.

Taxpayers should therefore take all possible steps to meet the relevant tax filing deadline particularly if they have been late in filing in previous years. Taxpayers with a history of late filing are particularly at risk and will face penalty action if they are late in filing their 2007/08 tax returns.

Important dates

Filing deadlines

All other Returns have to be submitted within one month of issue (or such shorter period as may be indicated on the Return.) The above deadlines will not apply to our clients for whom we have obtained an exemption from filing Profits Tax Returns on an annual basis.