Hong Kong – tax obligations for employers and taxpayers

Croner-i reports that the Hong Kong Inland Revenue Department has released a guidance document on various tax obligations for employers and employees.  

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The Hong Kong Inland Revenue Department has released a guidance document on the various tax obligations for taxpayers and employers.

The guidance sets out the following obligations on taxpayers, under various sections of the Inland Revenue Ordinance:

• Section 51(2) - Every person chargeable to tax for any year of assessment must inform the Commissioner of Inland Revenue in writing not later than four months after the end of the basis period for the year in which he is so chargeable unless he has already been required to furnish a return for that year;
• Section 51(6) - Any person who ceases to carry on a trade, profession, or business, or ceases to hold an office or employment, or ceases to be the owner of any land or buildings or land and buildings, of which tax is chargeable, or ceases to have a source of income in respect of which he is personally assessed, must inform the Commissioner in writing within one month of such cessation;
• Section 51(7) - Any person chargeable to Salaries Tax, Profits Tax, or tax under Personal Assessment who is about to leave Hong Kong for a period exceeding one month must notify the Commissioner in writing at least one month before he is due to leave. This does not apply to persons who are required to leave Hong Kong frequently in the course of his employment, business or profession;
• Section 51(8) - Any person chargeable to Property Tax, Salaries Tax, Profits Tax or tax under Personal Assessment who changes his address must notify the Commissioner in writing within one month.

The guidance also lists the following obligations on employers:

• Section 52(4) - An employer is required to furnish in writing the particulars of any new employee who is likely to be chargeable to Salaries Tax not later than three months after the date of commencement of the employment.
• Section 52(5) - An employer who is about to cease to employ in Hong Kong any person who is likely to be chargeable to Salaries Tax must notify the Commissioner in writing at least one month before such person ceases to be employed.
• Section 52(6) - The employer of any person who is chargeable to Salaries Tax and is about to leave Hong Kong for more than one month shall notify the Commissioner in writing not later than one month before the expected date of departure of such person. This does not apply to an employee who is required in the course of his employment to leave Hong Kong at frequent intervals.
• Section 52(7) - An employer who is required by Section 52(6) to give notice to the Commissioner the expected date of departure of an employee must not, except with the consent in writing of the Commissioner, make any payment of money or money's worth to the employee for a period of one month from the date of that notice.

The guidance points out, to furnish the information required under Sections 52(4), (5) and (6) of the Ordinance, employers should submit forms IR56E, IR56F and IR56G, respectively, via the Employer's Return e-Filing Services provided under eTAX.