Annual Return vs Profits Tax Return in Hong Kong

At a glance

The point most often misread: the two deadlines start differently. The annual return relies on you remembering the incorporation date; the profits tax return only starts running when the IRD posts the form. One is “nobody will remind you”; the other is “do not lose that letter”.

What does each form actually govern?

The annual return governs what your company looks like: directors, shareholders, secretary, registered address, share capital — updated, it becomes exactly what the public register shows. The profits tax return governs what your company earned: assessable profits, on BIR51 for corporations, BIR52 for unincorporated businesses, BIR54 for non-residents. Its contents are not public.

The two departments run separate systems and do not prompt each other.

Why do the deadlines get muddled so often?

Because they are counted from different starting points. The annual return runs 42 days from the incorporation anniversary — the date is the same every year, but nobody posts you a letter about it. The Registry has a free e-Reminder service; you have to register for it.

The profits tax return runs 1 month from the date the IRD issues it. The IRD issues them in bulk in early April — on 1 April 2026 it issued around 270,000 returns for 2025/26. So the risk on this one is the letter going to an old address, or sitting unopened in a pile.

A tax representative can apply for a block extension through the IRD’s electronic services for tax representatives, with returns classified N, D or M by year-end date; the actual deadline each year is announced by IRD circular. If you want an extension, appoint a representative early.

How different are the contents?

The annual return is factual information: who the directors are, who holds how many shares, where the registered address is. You already have all of it — check it and fill it in. Field by field: how to complete NAR1.

The profits tax return needs a full set of accounts: it must be submitted with audited financial statements and a profits tax computation. In practice, since 1 April 2023 small corporations and small businesses generally have to submit these supporting documents regardless of the level of income.

The sequence is: keep the books all year → hand them to the auditor after the year end → obtain the audited statements → only then can the return be completed. Starting to sort receipts when the form arrives leaves nowhere near a month’s worth of work. On preparing for the audit, see Hong Kong’s audit requirements.

How do the late penalties differ?

Both end in money, but the mechanisms differ.

The annual return is automatic fee first, possible prosecution second: a higher registration fee of HK$870 to HK$3,480 depending on how late, and separately, under s.662, the company and every responsible person can be prosecuted — a maximum fine of HK$50,000 for each default on conviction, plus HK$1,000 per day for a continuing default. Remedial steps: what to do when the annual return is late.

The profits tax return’s general policy is a penalty under s.80(5) in lieu of prosecution; but for repeated breaches or serious cases the IRD may prosecute under s.80(2) — on conviction, a fine of HK$10,000 plus a further penalty of up to 3 times the tax undercharged.

If the company has no business, can both be skipped?

No. As long as the company remains on the register, the annual return is filed every year; and a profits tax return, once issued, has to be completed and returned — nil income is still declared truthfully.

The classic dormant-company disaster: the owner feels “nothing has changed at the company”, then two or three years later wants to sell and discovers years of accumulated late fees and a pile of unreported changes.

Is there a third form?

Yes — and it is the one most often forgotten: the business registration renewal. It is administered by the Business Registration Office under the IRD pursuant to the Business Registration Ordinance, is a separate matter from the annual return, and is not a tax filing. The Business Registration Office generally issues a demand note around the middle of the month roughly one month before the certificate takes effect; if it does not arrive, you are responsible for notifying the Commissioner of Inland Revenue in writing within one month of the existing certificate expiring.

So an ordinary Hong Kong limited company has at least three independent deadlines a year: the Registry’s annual return, the IRD’s profits tax return, and the Business Registration Office’s BR renewal. Each is counted differently, and running them on memory alone eventually drops one.

Want all three lines in one view?

These two forms get confused because there is nowhere that shows all of it — the Registry does not remind you, the IRD relies on a letter, and the BR is another letter again.

AIcountant is a licensed Hong Kong TCSP: our company secretary service watches the Registry line for you; our accounting service keeps the books through the year and hands them to the auditor after the year end, so once the audited statements are in, the tax return can be completed.

Want it straightened out in one go? Talk to us, or get started.

This is general information. Annual return requirements are as published by the Companies Registry (cr.gov.hk); the profits tax return, filing deadlines, penalty policy and business registration arrangements are as published by the IRD (ird.gov.hk). Government fees and the annual extension arrangements are adjusted from time to time — the latest official announcements govern. This does not constitute legal or tax advice; for individual situations, consult a professional.