Taxation & Accounting

Accounting and Audit Services|Prepare Profit Tax Return

The professional accounting and audit services from easyCorp helps to prepare profit tax return, validate tax balance sheet accounts and facilitate your business with other tax-related advisory support.

An Overview of the Auditing and Accounting Services in Honk Kong

Like all other regions, companies based in Honk Kong also have to conduct accounting services and audit services to submit their financial statements and file their profit tax return to the Inland Revenue Department (IRD).

The IRD issues notices to companies for filing their tax return on 1st April of every year, which the latter must submit within 1 month after its notice. However, companies can also request for an extension date with respect to other year ending dates.

Although the standard financial year ending dates are 31st March and 31st December, no compulsions are followed. Where the deadline for filing tax return for a year ending in March is 15th November, the one for December is 15th August.

The profit tax return filing deadline for public listed companies is 2 months from the year ending date.

Companies having a gross income less than or equal to HK$2,000,000 do not need to file for tax return.

Financial Reporting Standards:

For audit services, companies and individuals follow the Hong Kong Financial Reporting Standards (HKFRS) and Hong Kong Accounting Standards (HKAS) as laid out by the Hong Kong Institute of Certified Public Accountants.

The HKFRS, based on its Framework for the Preparation and Presentation of Financial Statements presents measurement, recognition, disclosure and presentation requirements centred on transactions required with all financial statements.

Other than HKFRS, companies have to conform to the Small and Medium-sized Entity Financial Reporting Framework (SME-FRF) and International Financial Reporting Standards (IFRS). In case, an organization is based in China, they have to follow China Accounting Standards for Business Enterprises (CASBE).

For filing profit tax return, limited companies have to comply with the Hong Kong Financial Reporting Standards (HKFRS) and no other.

Auditing Standards:

Firms for audit services need to prepare their financial statements following Honk Kong’s auditing standards and applicable laws.

The auditing standards conform to its Hong Kong Institute of Certified Public Accountants (HKICPA). The HKICPA follow guidelines laid down by the International Federation of Accountants, in their International Auditing and Assurance Standards Board of the International Standards on Auditing.

Appointment of Auditors:

Auditors for accounting services in Hong Kong can be selected or rejected at any time. Auditors usually stay in office until the next year’s general meeting of their client.

Honk Kong does not have any mandatory rules pertaining to the rotation of auditors. However, for the sake of public interest, it has guidelines for the rotation of auditing firms.

Joint audits for profit tax return also exist among companies although rare and not restricted by the Hong Kong government.

Governmental Overview:

All firms conducting audit services stay under the monitor of a Quality Assurance Department in the Hong Kong Institute of Certified Public Accountants (HKICPA).

The HKICPA’s Practice Review Team keeps in check that all accountants and auditions use all ethical standards; so as to maintain a professional work environment. The Practice Review Team conducts all quality assurance and reports back to the board in charge of all these matters in the HKICPA.

A Professional Monitoring Team from the HKICPA also keeps in check the professionalism of an auditing firm; it ensures they follow all guideline of accounting services.

Any Hong Kong company that has conducted business must file audited account to the Inland Revenue Department, Our professional team provides you a one-stop tax planning service, including annual auditing, deferred tax analyses, tax basis balance sheet assistance and other free-of-charge advisory services.

Our scope of services includes:

  • Preparation and filing a tax return
  • Assist customers to reply any inquiries issued by the IRD
  • Supporting quarterly and annual tax provision calculations
  • Validating tax balance sheet accounts
  • Management Accounting

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Do You Know?

  1. A newly incorporated limited company should prepare its first audited financial statements after 18th months since its incorporation, and the subsequent ones are filed once every 12 months.
  2. Hong Kong taxation system is basically under a territorial tax principle, therefore, any profits arising or deriving from outside Hong Kong are considered as offshore profits and tax-free.  We can offer tax advice to clients in this aspect.