Profits Tax - Returns filed by small business
If the annual gross income of a business
does not exceed $2,000,000, the business is not required to supply Balance Sheet,
Profit & Loss Account, Audit Report (for corporations only) and supporting
schedules when it files the tax return. This filing concession applies to all
kinds of small businesses including sole-proprietors, partnerships and
Gross income includes:
sales and other ordinary business income;
sales income from closely connected
proceeds from the sale of capital assets;
other non-taxable income, whether or not
it is derived from the principal activity.
The filing concession does not dispense
with the legal requirement for keeping sufficient business records and
preparation of final accounts. In other words, business record and accounts must be kept as
if there had been no filing concession. Failure to keep business records
may lead to a penalty of HK$100,000.
Read what documents are required
on filing of profits tax return of
Notwithstanding the filing concession, the Revenue may from time to time request
production of business record for tax audit or investigation.