Guide for Employer’s Tax Return Filing in Hong Kong
An employer’s tax return filing in Hong Kong procedure still goes through the paper filing system, although the Inland Revenue Department (IRD) has been working on electronic submissions through its GovHK portal in recent years. While the tax return filing system in Hong Kong is not quite fully automated yet, the government has made progress on allowing the submission of some tax forms, including the IR56E, IR56F and IR56G online.
As an employer, you will have the responsibility of tax obligations from the minute you hire your first employee, regardless of whether this employee is working on premise within Hong Kong or otherwise. You will be obliged to maintain the following information for your employer tax return filing in Hong Kong process:
- Personal particulars of the employee
- The nature of their employment and capacity to which they are employed
- What the remuneration package entails
- What fringe benefits and non-cash benefits are included
- Details of the employer and employees contribute to the Mandatory Provident Fund (MPF) or equivalent
- The period of employment
- The terms and amendments of the employment contract
As an employer, you will be required to maintain your employee’s records, even if they have resigned from the company, for your accounting records for at least 7 years. You will also be required to notify the IRD if the following changes take place:
- A change in the employees’ personal particulars
- A change in the terms of employment
- Any change in the employees Hong Kong Identity Card number
Types of Forms an Employer’s Tax Return Filing in Hong Kong Involves
There are a few types of forms that an employer in Hong Kong will be required to file for tax purposes. These forms include:
- The IR56E – Which is the form that you must submit for the new employees you hire in the company. This form must be submitted within 3 months from the date of the new employee’s commencement.
- The IR56F – Employer must submit this form once an employee resigns, and the submission must be made one month prior to the cessation of the employee’s service.
- The IR56G – Foreign employees in the company who are leaving Hong Kong once they have resigned will require the employers to submit this form at least one month before the employee’s expected departure date.
- The IR56B – Employer’s in Hong Kong will be required to file this form yearly (even if the company has no employees) to the IRD for the calculation of the employee’s tax contribution. The filing period is done annually from 1 April to 30 April.
How Employer’s Tax Return Filings in Hong Kong Are Submitted
There are two ways in which an employer can file their tax returns in Hong Kong.
The first method allows the Authorised Signer to submit and complete the process online via the MyGovHK or eTAX Password. An Authorised Signer could be either the proprietor of a sole proprietorship, a precedent partner of a partnership, a director, Company Secretary, manager, provisional liquidator, investment manager or principal officer for a body of persons.
In November 2018, the mixed method of submission was introduced to meet the operational needs of certain employers. Employers can now submit their IR56B and IR56F data without an Authorised Signer’s eTAX information. Any authorised person appointed by the employer will be able to upload these forms. Once submitted, a Control List with a transaction reference number and QR code will be generated by the system. The Authorised Signer will need to sign and submit the Control List to the IRD and complete the process.
While multiple uploads daily using the mixed method approach is allowed, employers must ensure that the Control Lists which are generated are signed and submitted for the submission process to be completed.