The answer first
Many owners assume that filing one annual form with the Government covers everything. It does not. The Annual Return (NAR1) is a company law filing with the Companies Registry; the Profits Tax Return is a tax filing with the Inland Revenue Department. They have different deadlines, contents and penalties, and both are required.
Filing one does not satisfy the other; missing either can lead to fines and prosecution.
At a glance
- Annual Return
- Driven by your incorporation date; filed by the company each year
- Profits Tax Return
- Driven by your financial year end; filed when the IRD issues it
- Both required?
- Yes, every year, including when there is no income
Side by side
| Point | Annual Return (NAR1) | Profits Tax Return |
|---|---|---|
| Authority | Companies Registry | Inland Revenue Department |
| Law | Companies Ordinance | Inland Revenue Ordinance |
| Purpose | Confirms company particulars | Reports assessable profits for tax |
| Who starts it | The company files without being asked | The Department issues the return; the company completes it |
| Deadline (private company) | Within 42 days after the anniversary of incorporation | 1 month from issue, or the extended date under the Block Extension Scheme |
| Government fee | HK$105 on time, rising to HK$3,480 if late | No filing fee; tax payable per assessment |
| Attachments | None for a private company | Audited financial statements and tax computation (subject to exceptions) |
| Maximum penalty | HK$50,000 plus HK$1,000 per day, plus late fees | HK$10,000 plus up to three times the tax undercharged; estimated assessment |
How they fit together in a year
| When (31 March year end) | Event |
|---|---|
| April | Profits Tax Return issued; Employer's Return issued |
| Anniversary of incorporation + 42 days | Annual Return due |
| Within 9 months after year end | Audit complete; AGM or written resolutions |
| November (block extension, M code) | Profits Tax Return due if represented by a tax representative |
Key takeawayThe Annual Return is driven by your incorporation date; the Profits Tax Return by your financial year end. Most companies therefore have two different annual deadlines. Diarise both.
Common mistakes
- Assuming a company with no income does not need to file. Both filings remain required.
- Filing the Annual Return without first filing changes that occurred during the year.
- Ignoring a Profits Tax Return because the audit is not finished. Ask for an extension instead.
- Letting official mail go to an old address.
Self-check: where do you stand?
| Question | If the answer is no |
|---|---|
| Do you know your Annual Return due date? | Calculate it from your incorporation date |
| Do you know your financial year end and block extension code? | Confirm with us |
| Have all Profits Tax Returns issued to the company been filed? | File outstanding returns now |
| Is the audit timed to meet the tax return deadline? | Plan the audit backwards from the deadline |
| Does official mail reach you promptly? | Check your registered office and correspondence address |
How DBMS Global can help
- Filing your Annual Return each year as company secretary.
- Preparing and filing your Profits Tax Return as tax representative.
- One calendar for both, with reminders sent in advance.
In summary
- Two different filings, two authorities.
- Both are required every year.
- Late filing of either can lead to prosecution.
Official references
- Companies Registry: Annual Return, www.cr.gov.hk
- Inland Revenue Department: Profits Tax Return and Block Extension Scheme, www.ird.gov.hk