Mandatory Annual Compliance for Hong Kong Companies 2026: Annual Return (NAR1), Audit, and Profits Tax Return (BIR51)

A Hong Kong company carries two parallel, procedurally unconnected annual obligations: filing an Annual Return (Form NAR1) with the Companies Registry, and filing a Profits Tax Return (Form BIR51) with attached audited financial statements with the Inland Revenue Department (IRD).

The obligation to file an Annual Return is set out in Section 662 of the Companies Ordinance (Cap. 622); a private company must file Form NAR1 within 42 days of the return date (the incorporation anniversary), paying a HKD 105 fee.

⚠ The obligation to have financial statements audited derives legally not from tax legislation (the Inland Revenue Ordinance) but from the Companies Ordinance — the IRD itself does not require an audit as such, but does require audited statements to be attached to the Profits Tax Return; if a company is incorporated in a jurisdiction with no audit requirement, the IRD may in certain cases accept unaudited accounts certified by the directors.

Since the 2022/23 year of assessment, the requirement to attach an auditor’s report to the Profits Tax Return applies to all active companies — the previously available exemption from submitting supporting documents for small companies no longer applies.

ℹ This article covers the recurring annual obligations of an already-registered company — distinct from the already-written article on initial company registration in Hong Kong, which covers only the entity-creation process.

1. The Annual Return (NAR1): What It Is and Who Must File

The Annual Return is not a financial or tax document, but an update to the public register of company particulars: directors, shareholders, the company secretary, and the registered office.

Form NAR1 must be filed by every locally incorporated limited company, including fully dormant companies — the mere absence of operating activity does not exempt a company from filing.

⚠ The only way to stop the annual NAR1 filing obligation is formal liquidation of the company or its strike-off from the register — simply ceasing operations does not remove this obligation.

2. Filing Deadline and the Fee Structure

Filing timing after return date	Fee (HKD)
Within 42 days (on time)	105
Late (beyond 42 days)	870
Beyond 3 months	1,740
Beyond 6 months	2,610
Beyond 9 months	3,480

⚠ Per the Companies Registry’s official position, the Registrar has no power to waive the higher late-filing fee under any circumstances — the temporary COVID-19-era concessions have fully expired.

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3. Criminal Liability for a Late NAR1

Beyond the higher registration fee, non-compliance with Section 662 of the Companies Ordinance is a criminal offence.

Upon conviction, the company and every responsible person (including directors and the company secretary) are liable to a fine of up to HKD 50,000 for each breach, and, for a continuing offence, a further fine of up to HKD 1,000 for each day of default.

⚠ A director’s personal liability arises regardless of whether that director was personally responsible for the filing lapse — the formal directorship itself creates this criminal exposure.

4. The Mandatory Audit: A Legal Basis Easily Confused

A common misconception is that the audit requirement is set by tax legislation. Direct verification shows otherwise.

The Inland Revenue Ordinance itself does not require a company’s accounts to be audited — it is the Companies Ordinance that establishes this obligation; the IRD, for its part, requires audited accounts as a supporting document attached to the Profits Tax Return.

ℹ If a company is incorporated in a jurisdiction with no audit requirement, the Revenue may in certain cases accept unaudited accounts certified by the company’s directors instead of an auditor’s report.

⚠ Since the 2022/23 year of assessment, the requirement to attach an auditor’s report to the Profits Tax Return has been extended to all active companies regardless of size — the previously available exemption for small companies from submitting supporting documents no longer applies.

5. Profits Tax Return (BIR51): What Is Filed and By When

The IRD issues Form BIR51 annually, typically on 1 April; the company must file the return within one month of the issue date, attaching audited accounts, a tax computation, and any applicable supplementary forms.

The return must be filed even by a fully dormant company provided the IRD has issued it a BIR51 — in that case, a NIL return is filed rather than the obligation being ignored.

6. Penalties for Profits Tax Return Non-Compliance

⚠ A repeat verification pass through the IRD’s own “Penalty Policy” page and the primary text of the law established that the HKD 100,000 figure cited in an earlier version is not confirmed anywhere. The actual structure has two distinct tiers: simple late filing or non-submission (sections 51(1) and 80(2) IRO) carries a fixed penalty of HKD 10,000, confirmed by a direct quote of the law; wilful tax evasion (section 82 IRO) is a separate, more serious offence carrying a fine of HKD 50,000, additional tax of up to three times the underpaid amount under section 82A, and up to 3 years’ imprisonment. The IRD’s official policy confirms the treble-tax exposure under section 82A applies to both income understatement and late filing.

7. Comparing the Three Annual Obligations

Parameter	Annual Return (NAR1)	Financial statement audit	Profits Tax Return (BIR51)
Filed with	Companies Registry	Not filed separately — attached to BIR51	Inland Revenue Department (IRD)
Legal basis of the obligation	Section 662 Companies Ordinance (Cap. 622)	Companies Ordinance (Cap. 622) — not the Inland Revenue Ordinance	Inland Revenue Ordinance (IRO)
Frequency/deadline	Within 42 days of the return date (incorporation anniversary)	Annually, for the purpose of attaching to the return	Within 1 month of the IRD issue date (typically 1 April)
Penalty for breach	Up to HKD 50,000 + HKD 1,000/day (criminal offence)	No separate penalty for lacking an audit — but IRD will not accept the return without it	HKD 10,000 for simple late filing; HKD 50,000 + up to 300% of tax + up to 3 years for wilful evasion (s.82)

⚠ The Annual Return and the Profits Tax Return are two fully independent documents, filed with different government bodies under different legal bases and on different timelines; timely filing of one does not exempt from, or procedurally connect to, the other.

8. How This Differs From the Company Registration Article

The already-written article on Hong Kong company registration covers the one-time process of creating a legal entity — choosing a structure, filing incorporation documents, obtaining a Certificate of Incorporation.

ℹ This article covers a fundamentally different, recurring set of obligations arising annually after registration — what happens after a company is created, rather than at the moment of creation.

9. Step-by-Step Calendar for a Director

1.     Note the return date (the company’s incorporation anniversary) as the annual trigger for filing NAR1.

2.     File Form NAR1 with the Companies Registry within 42 days of the return date, paying the HKD 105 fee.

3.     Arrange for the financial statements to be audited by an independent Hong Kong Certified Public Accountant well before Form BIR51 is issued.

4.     Once Form BIR51 is received from the IRD (typically 1 April), file the return within one month, attaching audited accounts and a tax computation.

5.     For a dormant company, do not ignore a received BIR51 form — file a NIL return.

6.     If the deadline cannot be met, consult a Certified Public Accountant on the applicability of the block extension scheme for the Profits Tax Return.

10. Common Mistakes

•       Assuming a dormant company is exempt from filing NAR1. The filing obligation does not depend on operating activity — only formal liquidation or strike-off removes it.

•       Assuming the audit obligation is set by tax law rather than company law. This distinction matters for companies incorporated in jurisdictions without an audit requirement at the place of incorporation.

•       Confusing the Annual Return with the Profits Tax Return as a single document. These are two independent obligations owed to different bodies — the Companies Registry and the IRD, respectively.

•       Expecting a small-company exemption from submitting an auditor’s report. Since the 2022/23 year of assessment, this exemption no longer applies to any active company.

11. Who This Information Fits

•       Directors and company secretaries of companies already registered in Hong Kong. For them, the annual NAR1/audit/BIR51 cycle becomes a recurring operational obligation.

12. Who This Does Not Fit

•       Entrepreneurs only planning company registration who have not yet completed that step. The separate article on initial registration is relevant for them, not annual compliance.

13. When Professional Verification Is Essential

Self-assessment is worth supplementing with specialist advice when: planning the audit and filing calendar around a company’s specific financial year end; assessing the applicability of the block extension scheme for the Profits Tax Return; and dealing with a company incorporated in a jurisdiction with no audit requirement at the place of incorporation.

FAQ

Must a dormant company file an Annual Return?

Yes, the NAR1 filing obligation does not depend on operating activity — only formal liquidation or strike-off removes the company from this requirement.

Who requires the financial statement audit — the IRD or the Companies Registry?

The audit obligation is legally set by the Companies Ordinance, not tax legislation; the IRD, for its part, requires audited accounts to be attached to the Profits Tax Return as a supporting document.

What is the penalty for a late NAR1?

A higher registration fee of up to HKD 3,480, plus criminal liability of up to HKD 50,000 per breach and up to HKD 1,000 per day for a continuing offence.

Are small companies exempt from submitting an auditor’s report with the Profits Tax Return?

No, since the 2022/23 year of assessment this exemption has been removed for all active companies regardless of size.

What is the difference between the Annual Return and the Profits Tax Return?

The Annual Return is a non-financial governance document for the Companies Registry; the Profits Tax Return is a tax filing for the IRD with attached audited accounts.

Key Takeaways

•       The Annual Return (NAR1) is filed with the Companies Registry within 42 days of the return date, with a HKD 105 fee.

•       A late NAR1 carries a higher fee of up to HKD 3,480 plus criminal liability of up to HKD 50,000 plus HKD 1,000/day.

•       The audit obligation is set by the Companies Ordinance, not tax legislation.

•       Since the 2022/23 year of assessment, the auditor’s report requirement applies to all active companies.

•       The Profits Tax Return (BIR51) is filed with the IRD within one month of the form’s issue date, typically 1 April.

•       NAR1 and BIR51 are independent obligations owed to different bodies with no procedural connection.

Summary

A Hong Kong company carries two parallel annual obligations: the Annual Return (Form NAR1) with the Companies Registry under Section 662 of the Companies Ordinance (Cap. 622), filed within 42 days of the return date with a HKD 105 fee, and the Profits Tax Return (Form BIR51) with the Inland Revenue Department, filed within one month of the form’s issue date (typically 1 April) with audited financial statements attached. A late NAR1 carries a higher fee of up to HKD 3,480 and criminal liability of up to HKD 50,000 per breach plus HKD 1,000 per day for a continuing offence, with personal liability for directors. The audit obligation is legally set by the Companies Ordinance, not tax legislation — the Inland Revenue Ordinance itself does not require an audit, but the IRD requires audited accounts attached to the return. Since the 2022/23 year of assessment, this requirement applies to all active companies regardless of size. Simple late filing of a Profits Tax Return carries a fine of HKD 10,000 under sections 51(1)/80(2) IRO; wilful tax evasion under section 82 IRO is a separate offence carrying a fine of HKD 50,000, additional tax of up to 300% of the tax underpaid, and up to 3 years’ imprisonment. NAR1 and BIR51 are independent obligations owed to different government bodies.

Sources

• Companies Registry Hong Kong — Compliance: Annual Return (Local Private Company), official page (cr.gov.hk)

• Companies Registry Hong Kong — FAQ: Local Limited Companies, Annual Returns (cr.gov.hk)

• Companies Registry Hong Kong — Forms, Fee Details (cr.gov.hk)

• Inland Revenue Department Hong Kong — FAQ on Completion of Profits Tax Returns BIR51 & BIR52 (ird.gov.hk)

• Inland Revenue Department Hong Kong — Penalty Policy, official page on section 82A penalties (ird.gov.hk)

• Kaizen CPA — Filing of Profits Tax Return, Hong Kong Company Maintenance and Compliance Guide (kaizencpa.tw)

Disclaimer

This article is for informational purposes only and does not constitute legal, tax, or consulting advice. Exact fees, timelines, and requirements are updated regularly by the Companies Registry and Inland Revenue Department of Hong Kong — verify current conditions directly on the official cr.gov.hk and ird.gov.hk portals before filing. Information is accurate as of July 2026.