The Hong Kong Profits Tax Return in 2026: BIR51, BIR52 and BIR54, Block Extension and Mandatory E-Filing

A Hong Kong profits tax return is not a self-initiated annual filing — it is a response to an individual notice from the tax authority. The obligation arises the moment the Inland Revenue Department (IRD) issues a notice under section 51(1) of the Inland Revenue Ordinance (Cap. 112). BIR51 serves corporations, BIR52 serves persons other than corporations, and BIR54 is used in respect of non-resident persons. The bulk issue of 2025/26 returns took place on 1 and 2 April 2026; the default filing period is one month from the date of issue for BIR51 and BIR52, and two months for BIR54.

⚠️ The headline change of 2026. The first phase of mandatory electronic filing of the profits tax return came into operation on 1 April 2026. It does not apply to everyone — only to a “phase 1 applicable entity”, meaning a Hong Kong entity of a multinational group within the scope of the global minimum tax. The legal basis is section 51AAB of and Schedule 65 to Cap. 112, both introduced by Ordinance No. 21 of 2025. For those entities the semi-electronic filing mode is expressly not accepted.

Key parameters of the 2025/26 profits tax return

Parameter	Value
Return forms	BIR51 (corpo­ratio­ns), BIR52 (persons other than corpo­ratio­ns), BIR54 (in respect of non-resident persons)
Legal basis for requiring the return	Section 51(1), Inland Revenue Ordinance (Cap. 112)
Bulk issue for 2025/26	1 April 2026 — “active” files; 2 April 2026 — “inactive” files
Default filing period, BIR51 and BIR52	1 month from the date of issue
Default filing period, BIR54	2 months from the date of issue
Due date for accounting date code “N”	4 May 2026 (no block extension)
Extended due date for code “D”	31 August 2026 (paper) / 2 October 2026 (electronic)
Extended due date for code “M”	16 November 2026 (paper); 1 February 2027 for loss cases
Mandatory e-filing	Phase 1 applicable entity — for a year of assessment beginning on or after 1 April 2025
Notification of chargeability	Section 51(2) — not later than 4 months after the end of the basis period
Record retention	Section 51C — not less than 7 years
One-off reduction for 2025/26	100% of the tax, capped at HK$3,000 per case

It is the date the return is issued, not the end of the financial year, that starts the clock. This is the structural difference between Hong Kong and most civil-law systems: Cap. 112 fixes no calendar filing date for profits tax. Section 51(1) speaks only of “a reasonable time stated in such notice” — the one month, or two months, is printed on the form itself, and the accounting date code system and the Block Extension Scheme are built on top of that administratively.

This guide works through the three return forms, the exact 2025/26 deadlines, the Block Extension Scheme for tax representatives, the new mandatory e-filing regime with iXBRL, the S1–S22 supplementary forms, the penalty regime for late and incorrect returns, and provisional profits tax with its holdover mechanics. If you are still designing the structure, start with our overview of Hong Kong company registration in 2026 and of mandatory annual compliance for Hong Kong companies.

The normative base: which instruments govern the profits tax return

The profits tax return is governed by one principal ordinance and two supporting ones. The principal instrument is the Inland Revenue Ordinance (Cap. 112). The supporting instruments are the Interpretation and General Clauses Ordinance (Cap. 1), which governs the computation of time, and the Criminal Procedure Ordinance (Cap. 221), which fixes the monetary value of each fine level.

The consolidated text of Cap. 112 current at the time of writing carries a version date of 22 May 2026 — it therefore already incorporates the amendments made by Ordinance No. 2 of 2026.

One instrument sits outside that consolidation. The Inland Revenue (Amendment) (Automatic Exchange of Information) Ordinance 2026 — Ordinance No. 4 of 2026, gazetted on 26 June 2026 — comes into operation on 1 January 2027 and is therefore not yet in the consolidated text. It touches neither the profits tax return provisions, nor Part 4AA, nor Schedule 65: its subject matter is automatic exchange of information.

Instrument / provision	Subject matter	Version and source
Inland Revenue Ordinance (Cap. 112)	Profits tax generally; requiring returns, and their form, timing and content	Consolidation as at 22.05.2026
s.51(1) Cap. 112	The assessor’s power to require a return “within a reasonable time stated in such notice”	Replaced 52 of 1993, amended 5 of 2003
s.51(2) Cap. 112	Duty to notify chargeability within 4 months after the end of the basis period	Replaced 49 of 1956
s.51(6) Cap. 112	Duty to notify cessation of business within 1 month	Replaced 49 of 1956
s.51AA Cap. 112	Form and manner of furnishing a return: paper, template, electronic record, telefiling	Amended 18 of 2021, s. 7
s.51AAB Cap. 112	Specified person must furnish a specified return in the form of an electronic record	Replaced 21 of 2025, s. 21
s.51AAC Cap. 112	Commi­ssio­ner’s power to disregard a return not furnished in the required form	Added 18 of 2021, s. 8
s.51AAD Cap. 112	Engaging a service provider; the taxpayer’s confirmation; 7-year retention	Added 18 of 2021, s. 8
s.51C Cap. 112	Business records to be kept for not less than 7 years	Amended 7 of 1986
s.59(3) Cap. 112	Estimated assessment where no return has been furnished	Amended 49 of 1956
s.64(1) Cap. 112	Objection to an assessment; the return condition on objecting to an estimated assessment	—
ss. 63G–63K Cap. 112	Provisional profits tax: liability, amount, demands, holdover, application	s.63H amended 17 of 2022, s. 9
ss. 80, 80K–80N, 82, 82A Cap. 112	Offences, fines, additional tax in lieu of prosecution	ss.80K–80N added 18 of 2021, s. 12
s.100 and Schedule 43 Cap. 112	One-off reduction of taxes; for 2025/26, 100% capped at HK$3,000	2025/26 entry added 2 of 2026, s. 6
Schedule 65 to Cap. 112	Defines “specified person”, “specified return” and “specified year of assessment”	Added 21 of 2025, s. 31
Inte­rpre­tation and General Clauses Ordinance (Cap. 1), s.71	Computation of time; roll-over for public holidays, black rainstorm and gale warning days	Amended 68 of 1995, E.R. 1 of 2017
Criminal Procedure Ordinance (Cap. 221), Schedule 8	Fine levels: level 3 — HK$10,000, level 4 — HK$25,000, level 5 — HK$50,000, level 6 — HK$100,000	Added 58 of 1994

The three amending ordinances that shaped the current regime

Inland Revenue (Amendment) (Miscellaneous Provisions) Ordinance 2021 — Ordinance No. 18 of 2021. It is this ordinance, and no later one, that built the electronic filing framework: it replaced section 51AA, inserted sections 51AAB, 51AAC and 51AAD, and created the service-provider offences in sections 80K to 80N. It took effect on 11 June 2021; no separate commencement notice was issued, so the provisions began to operate on gazettal.

Inland Revenue (Amendment) (Minimum Tax for Multinational Enterprise Groups) Ordinance 2025 — Ordinance No. 21 of 2025. This ordinance wholly replaced section 51AAB and added Schedule 65. It took effect on 6 June 2025. The practical significance of the replacement is this: the 2021 model gave the Commissioner an open-ended power to require electronic filing from any “class or description of persons” by Gazette notice, whereas the 2025 model ties the obligation to a closed table in Schedule 65. Section 51AAB(4), however, preserves the Commissioner’s power to amend Schedule 65 by notice published in the Gazette — so the later phases of mandatory e-filing will arrive by subordinate instrument rather than by fresh primary legislation.

⚠️ A sourcing trap. Commentary describing “the Commissioner’s power under section 51AAB to require electronic filing from a class of persons” is reproducing the repealed 2021 text. The current section 51AAB contains no such power; it contains the obligation itself, addressed to a person identified in Schedule 65.

Inland Revenue (Amendment) (Tax Concessions, Concessionary Deductions and Allowances) Ordinance 2026 — Ordinance No. 2 of 2026. Passed by the Legislative Council on 13 May 2026 and gazetted on 22 May 2026. So far as profits tax is concerned this ordinance does exactly one thing: it adds the 2025/26 entry to Schedule 43, granting a 100% reduction subject to a HK$3,000 ceiling. It does not change any profits tax rate.

BIR51, BIR52 and BIR54: which form goes to whom

The three profits tax return forms are distinguished not by the size of the business or the amount of profit but by the legal status of the person to whom the notice is addressed. IRD states plainly that there are three series of profits tax return forms.

Form	Official title	Addressee	Default filing period	Declaration part
BIR51	Profits Tax Return — Corporations	Corporations, including Hong Kong branches of foreign companies and open-ended fund companies	1 month from the date of issue	Part 13
BIR52	Profits Tax Return — Persons Other Than Corporations	Partnerships, bodies of persons, limited partnership funds, estates	1 month from the date of issue	Part 12
BIR54	Profits Tax Return — In Respect Of Non-Resident Persons	Completed by the Hong Kong agent or payer in respect of a non-resident	2 monthsfrom the date of issue	Part 9

A sole proprietor does not file BIR52

This is the single most common error in secondary material on Hong Kong. IRD states the rule directly: where a business is 100% owned by you, you report it in Part 5 of your Tax Return — Individuals (BIR60), not on BIR52. BIR52 applies only where the business was not solely owned by you for the full year — in practice, to partnerships.

The practical consequence: a sole proprietor in Hong Kong has no separate profits tax filing deadline at all. They are governed by the BIR60 timetable, which in 2026 runs differently: BIR60 was bulk-issued on 4 May 2026, and the extended due date for represented sole-proprietorship cases is 5 October 2026.

BIR54: a return filed by someone other than the taxpayer

BIR54 is structurally unlike the other two forms. IRD’s notes state that it “is for use in respect of persons (individuals, firms, companies, societies, etc.) who are not residents in Hong Kong and who have no branch offices of their own in Hong Kong”. The form cites section 51(1) of Cap. 112 as the basis on which it is required.

The substantive law sits in sections 20A and 20B of Cap. 112:

Section 20A(1) provides that a non-resident person “shall be chargeable to tax either directly or in the name of his agent” in respect of all profits arising in or derived from Hong Kong from a trade, profession or business carried on in Hong Kong, “whether such agent has the receipt of the profits or not”. Where there is more than one agent they may be charged jointly or severally and are jointly and severally liable.

Section 20A(2) is a retention duty: a person chargeable as agent “shall retain out of any assets coming into his possession or control on behalf of such other person” enough to produce the amount of the tax, and is statutorily indemnified for doing so.

Section 20B(3) is a deduction at source duty: a person in Hong Kong who pays or credits to a non-resident the sums described in section 20B(1) “shall, at the time he makes the payment or credit, deduct from those sums so much thereof as is sufficient to produce the amount of such tax”.

⚠️ Do not conflate sections 20A(2) and 20B(3). The first is passive retention by an agent out of assets already in hand. The second is active deduction by a payer at the moment of payment — and the trigger is not payment alone but crediting: an accrual entry alone starts the obligation. Both carry a statutory indemnity, which is the answer to a non-resident who objects to being short-paid.

Separately from BIR54 there is BIR52B. Section 20A(3) requires a person who sells goods in Hong Kong on behalf of a non-resident to furnish the Commissioner quarterly with a return of the gross proceeds of those sales, and at the same time to pay over 1% of those proceeds (or such lesser sum as may have been agreed). The Commissioner may exempt a person from this requirement on such conditions as he considers fit. The BIR51 notes confirm that a separate quarterly form, BIR52B, is used, and that it is issued on application.

A 2025 amendment to both sections has gone almost unremarked. Ordinance No. 21 of 2025 introduced the same definition into each: “In this section — tax means tax charged under this Part.” The mechanics differ, however. In section 20A, subsection (4) was added in its entirety (section 10 of the amending ordinance). In section 20B, subsection (4) already existed as the interpretation subsection carrying the definitions of “commercial occasion or event” and “entertainer or sportsman”; section 11 of the amending ordinance merely inserted the definition of “tax” into it, while also amending the “entertainer or sportsman” definition. The clarification fences the agency-taxation machinery off from the new Part 4AA top-up taxes.

If you are structuring payments to non-residents it is worth reading our analysis of the territorial source principle in Hong Kong alongside this — the source of the profit determines whether a BIR54 obligation arises at all.

Bulk issue and the default deadlines: how “one month” is actually counted

Profits tax returns are issued in bulk once a year, on the first working day of April. For the year of assessment 2025/26 that exercise took place on 1 April 2026, when IRD issued about 270,000 profits tax returns. Files classified as “inactive” were issued on 2 April 2026.

The Government press release states the default rule in these terms: taxpayers and employers “are generally required to file their returns within one month from the date of issue”, and for cases with a tax representative appointed the deadlines are set out in the block extension letter.

Why the statute fixes no date

Section 51(1) of Cap. 112 contains no period at all. Its text: an assessor “may give notice in writing to any person requiring him within a reasonable time stated in such notice to furnish any return which may be specified by the Board of Inland Revenue” for property tax, salaries tax or profits tax.

Three practical consequences follow:

1.        The “one month” is administrative, not statutory. It is printed on the face of BIR51 and BIR52: “ALL parts/sections of the return together with any required supplementary forms MUST be completed and submitted to the Department WITHIN 1 MONTH from the date of issue of this return.”

2.        BIR54 runs on a different clock. The face of BIR54 states that the completed return and the Control List of required supplementary forms (if applicable) must be submitted within 2 MONTHS from the date of issue “together with a certified copy of your account with the non-resident person”.

3.        The notice to file issued to mandated e-filers also allows two months. The paper Notices to File used from 1 April 2026 — IRC1952 for corporations and IRC1953 for persons other than corporations — state a period of two months from the date of the letter and cite sections 51(1) and 51AAB and Schedule 65.

⚠️ The proposition that “all profits tax returns are due within one month” is false. It holds for BIR51 and BIR52 but not for BIR54 and not for the IRC1952/IRC1953 notices. The BIR54 and IRC1952 periods appear only on the face of the PDF forms; IRD publishes no HTML notes for BIR54 at all.

Computation of time: section 71 of Cap. 1

The roll-over rule in Hong Kong is set not by tax legislation but by section 71 of the Interpretation and General Clauses Ordinance (Cap. 1), which applies to Cap. 112 by general operation of law. IRD publishes no page of its own on the point, so the citation should be to Cap. 1.

Rule	Provision	Content
The day of the event is excluded	s.71(1)(a)	A period of days is exclusive of the day the event happens
Roll-over of the last day	s.71(1)(b)	If the last day is a public holiday, gale warning day or black rainstorm warning day, the period includes the next day that is none of those
Roll-over of an act due on a day	s.71(1)(c)	The act is in due time if done on the next day that is none of those
Short periods	s.71(1)(d)	In a period of not more than 6 days, holidays, gale warning days and black rainstorm warning days are not reckoned at all
Acts done at a court office	s.71(1A)	A separate “closure day” regime applies to acts and proceedings at a court office, to the exclusion of subsections (1)(b), (c) and (d). That is the only place in section 71 where a Saturday counts, and it has no application to filing with IRD

Two points that are routinely stated wrongly.

Sunday rolls the deadline; Saturday does not. Cap. 1 defines “public holiday” by reference to the General Holidays Ordinance (Cap. 149), whose Schedule lists at item (a) “every Sunday”. Saturday appears nowhere in that list. A deadline falling on a Sunday therefore moves to the Monday; a deadline falling on a Saturday does not move at all.

Only the black rainstorm signal counts. Section 71(2) of Cap. 1 defines a “black rainstorm warning day” as any day “throughout or for part of which a black rainstorm warning is in force”. Amber and red signals have no effect on the computation of time. Equally, a black signal in force for twenty minutes at six in the morning converts the entire day.

How this works on a real 2026 date

The due date for “N” code returns for 2025/26 is 4 May 2026. That date is IRD’s own: it appears in paragraph 7 and Appendix II of the block extension letter.

It is worth tracing how the statute and the practice relate. One month from the 1 April 2026 bulk issue gives Friday 1 May 2026, but 1 May is Labour Day, a general holiday under item (j) of the Schedule to Cap. 149. Section 71(1)(c) of Cap. 1 carries the deadline to “the next following day, not being a public holiday or a gale warning day or black rainstorm warning day”. Saturday is not on that list — so on the bare words of section 71 the deadline would fall on Saturday 2 May 2026.

IRD states 4 May 2026, a Monday. The difference is explained by the Department’s administrative practice rather than by the text of section 71: IRD does not require filing on a non-working day. The practical lesson runs two ways. Work from the date IRD publishes, not from your own Cap. 1 computation. And do not generalise the approach: the rule that a Saturday does not move a deadline operates literally in section 71, and the only Saturday carve-out is in section 71(1A), which applies solely to acts done at a court office.

The Block Extension Scheme for 2025/26: the exact dates

The Block Extension Scheme is an administrative extension mechanism available only to taxpayers who have appointed a tax representative. A taxpayer without a representative gets exactly the period printed on the return, and no accounting date code applies to them.

The scheme for the year of assessment 2025/26 is set out in the Commissioner’s circular letter to tax representatives issued on 19 March 2026 and headed “Circular Letter to Tax Representatives — Block Extension Scheme for Lodgement of 2025/26 Tax Returns by Tax Representatives”.

Accounting date codes and extended due dates

Paragraph 7 of the letter frames the rule as follows: “For taxpayers who are represented, the compliance date specified in the notice on page 1 of the 2025/26 Profits Tax Return will be extended as follows.”

Code	Accounting date range (financial year end)	Paper filing due date	Electronic filing due date
N	1 April 2025 — 30 November 2025	4 May 2026 (no extension)	4 June 2026 (derived)
D	1 December 2025 — 31 December 2025	31 August 2026	2 October 2026
M	1 January 2026 — 31 March 2026	16 November 2026	16 December 2026 (derived)
M, loss cases	1 January 2026 — 31 March 2026	1 February 2027	—

⚠️ The accounting date ranges are tied to the specific year of assessment. They cannot be carried across years. For 2025/26, code “N” covers year ends from 1 April 2025 to 30 November 2025, not “1 April to 30 November” in the abstract.

Code “D” was extended a second time — and that changes the date

The original 17 August 2026 date for code “D” has been superseded. By a supplementary circular letter dated 14 July 2026, signed by the Commissioner of Inland Revenue CHAN Sze-wai, Benjamin, IRD extended the due date for 2025/26 profits tax returns with accounting date code “D”:

•          in paper form — from 17 August 2026 to 31 August 2026;

•          electronically — from 17 September 2026 to 2 October 2026.

This is not a contradiction between sources but a sequence: the principal letter of 19 March 2026 carries 17 August, and the supplementary letter of 14 July 2026 replaces it. Any publication citing only the principal letter is quoting a stale date.

Code “M” and loss cases: two different application deadlines

The further extension for code “M” to 1 February 2027 is granted “subject to the condition that the Profits Tax Return to be lodged should show an allowable loss”. The application must be made in advance, and there are two distinct routes:

•          a bulk (list) application — “NO LATER THAN 2 November 2026”;

•          an individual request — on or before 16 November 2026.

The practical significance of the difference: the list route is cheaper for a representative with a large portfolio, but it requires the loss-making clients to be identified a fortnight before the ordinary “M” code due date.

The 2025/26 scheme calendar (Appendix II to the letter)

Date	Event
1 and 2 April 2026	Bulk issue of profits tax returns
4 May 2026	Deadline for the list of new clients
4 May 2026	Deadline for notifying ceased clients and changes of accounting date
4 May 2026	Due date for “N” code returns in paper form (active and inactive files)
4 May 2026	Bulk issue of BIR60 (Tax Return — Individuals)
1 June 2026	Deadline for notifying changes occurring between 4 and 31 May
4 June 2026	Deadline for notifying new and ceased BIR60 repre­senta­tion
4 July 2026	Extended due date for represented BIR60 cases without a business
31 August 2026	Extended due date for “D” code returns in paper form
5 October 2026	Extended due date for represented BIR60 sole­-proprie­torship cases
2 November 2026	Deadline for the loss-case extension list for code “M”
16 November 2026	Extended due date for “M” code returns in paper form
1 February 2027	Final extended due date for “M” code loss cases

The extra month for electronic filing: automatic for some, on application for others

Filing electronically buys an extra month — but how that month is obtained differs between mandated and voluntary e-filers.

For persons mandated to file electronically (paragraph 16 of the 19 March 2026 letter) the further month is granted automatically, provided the Part 4AA entity notified the Department before March 2026. Those who did not notify must submit an individual request.

For voluntary e-filers (paragraph 18) the extension is granted only on application and “subject to the condition that your client will e-file its Profits Tax Return through the BTP”. The application must reach IRD at least 7 working days before the return’s due date.

For cases falling within the exceptions to mandatory e-filing (paragraph 17) only the standard extensions apply — no extra month is available, because the return is being filed on paper.

Paragraph 18 sets out the arithmetic: the further one-month extension is “counted from the date immediately after the extended due date provided in paragraph 7 or the normal due date of the return, whichever is the later”.

Category	Extra month	Application required	Application deadline
Phase 1 applicable entity that notified before March 2026	Yes, automatic	No	—
Phase 1 applicable entity that did not notify	Yes	Yes, individually	Ordinary rules
Voluntary e-filer through the BTP	Yes	Yes	7 working days before the due date
Case within an exception, filed on paper	No	—	—
Taxpayer with no repre­senta­tive	Yes, if filing ele­ctroni­cally	Yes	No lead time stated by IRD — see the note below

IRD separately confirms the standing incentive: “A further extension of 1 MONTH will be granted by the Department on application if the taxpayer or its service provider e-files the Profits Tax return voluntarily.”

⚠️ The “7 working days” requirement comes from a circular letter addressed to tax representatives.IRD’s general statement for unrepresented taxpayers gives no lead time at all. Applying later than seven working days out is imprudent in any event, but treating that as a hard deadline for an unrepresented taxpayer is an extrapolation, not a rule.

Electronic block extension: mandatory through the TRP from 2026

From April 2026 tax representatives must submit block extension applications and notifications electronically and by no other route. IRD states it directly: “Starting from April 2026, the tax representatives must submit electronically their block extension applications or notifications in respect of their clients’ Profits Tax Returns and Tax Returns – Individuals through the online block extension service provided under the Tax Representative Portal (‘TRP’).”

IRD flags this on its site as “Electronic Block Extension Scheme — Full Adoption from the Year of Assessment 2025/26” — the full changeover therefore lands precisely on the year of assessment 2025/26.

The transitional email route remains open, and IRD has announced no closing date for it. Under the heading “Transitional arrangement” the Department states: “Besides the use of online services under the TRP, tax representatives may submit their relevant applications and notifications in a prescribed Excel template together with a signed confirmation letter in PDF format by email.” No end date for that arrangement appears on the page.

⚠️ 1 June 2026 should not be mistaken for the closing date of the email route. It is the deadline for three specific categories of change under the Block Extension Scheme: an extension request for a new client, notification of clients that have ceased to be represented, and an extension request for existing clients on a change of accounting date code.

⚠️ The practical risk for representatives. Because electronic block extension is compulsory, a representative without a working TRP account cannot use the scheme at all — their clients simply remain on the default one month from the date of issue. TRP registration is not instantaneous: it requires the agent’s business to hold a BTP Business Account first, and the individual to hold an Individual Tax Portal account.

Mandatory electronic filing: section 51AAB and Schedule 65

Mandatory e-filing in Hong Kong in 2026 applies not to everyone but to one narrow class defined by reference to the global minimum tax. This is the most frequent misconception about the regime.

The current text of section 51AAB(1) of Cap. 112 reads: “A person who is required under section 51(1) to furnish a specified return for a specified year of assessment must file it in the form of an electronic record if the person is a specified person for that year of assessment.”

Section 51AAB(3) pushes all three definitions into Schedule 65: specified person is a person specified in column 2 of Part 1 of Schedule 65 opposite that year of assessment; specified return is the return specified in column 3; specified year of assessment is a year specified in column 4.

What Schedule 65 actually says

Part 1 of Schedule 65 contains a single row:

Column 1	Column 2 — Specified person	Column 3 — Specified return	Column 4 — Specified year of assessment
1.	Phase 1 applicable entity	Return for profits tax under Part 4, of either of the following types: (a) profits tax return — corporations; (b) profits tax return — persons other than corporations	Year of assessment beginning on or after 1 April 2025

Two consequences matter in practice.

First: BIR54 is not on the list. Column 3 names only the corporations return and the persons-other-than-corporations return. BIR54 is not in Schedule 65 and therefore falls entirely outside the first phase of mandatory e-filing. That is precisely why no new Item 3.9 was added to BIR54, unlike BIR51 and BIR52.

Second: the year of assessment is 2025/26, not 2026/27. The Schedule says “beginning on or after 1 April 2025”. The 1 April 2026 date that IRD describes as the start of phase 1 is the date the first mandated returns were issued, not the date from which the provision operates.

Who is a “phase 1 applicable entity”

Part 2 of Schedule 65 defines the class through two cumulative conditions. An entity or permanent establishment is a phase 1 applicable entity for a year of assessment if:

(a) it is a Part 4AA entity of an MNE group for the corresponding fiscal year of the group; and

(b) any of the following applies: (i) the MNE group is an in-scope MNE group for the corresponding fiscal year beginning on or after 1 January 2025; or (ii) the MNE group was an in-scope MNE group for a preceding fiscal year beginning on or after 1 January 2025.

Neither term is defined in Part 4AA — both are defined in section 1(1) of Schedule 63 to Cap. 112:

•          in-scope MNE group — an MNE group that meets the consolidated revenue threshold in at least 2 of the 4 fiscal years immediately preceding the fiscal year under Article 1.1 of the GloBE rules (as modified by Article 6.1 where applicable);

•          Part 4AA entity — (a) a HK constituent entity of the group; (b) a HK standalone JV; (c) a HK member of a JV group; or (d) a Part 4AA stateless constituent entity of the group.

⚠️ A definitional trap. Identically worded definitions of in-scope MNE group and HK constituent entity also appear in section 2(1) of Schedule 62 (the Hong Kong minimum top-up tax, HKMTT). Schedule 65 points specifically to Schedule 63. Citing by page position makes it easy to land on the wrong schedule.

The “once in, always in” rule is statutory

Section 3 of Part 2 of Schedule 65 puts it directly: an entity that is, under section 2, a phase 1 applicable entity for a year of assessment “remains to be a phase 1 applicable entity for every subsequent year of assessment, whether or not it meets any of the conditions in section 2(a) and (b) of this Part for any such subsequent year of assessment”.

This is not IRD administrative practice but a provision of a Schedule to the Ordinance. The consequence: a group that crossed the GloBE threshold once and then fell back below it does not regain the right to file on paper.

How the later phases will arrive

Section 51AAB(4): “The Commissioner may, by notice published in the Gazette, amend Schedule 65.” Extending mandatory e-filing to mid-sized and small businesses will not require a bill through the Legislative Council; a Gazette notice will be enough.

IRD’s stated end point is full-scale implementation of mandatory e-filing. Its second consultation paper (November 2021) put it this way: “The ultimate goal of the IRD is to achieve full-scale implementation of mandatory e-filing by 2030.”

⚠️ The 2030 date needs careful attribution. It is IRD’s own wording, but it appears in a 2021 consultation paper. IRD’s current live pages say only: “The requirement for mandatory e-filing will be implemented by phases, starting with large businesses first and then progressing to entities of smaller scale. The ultimate goal of the Department is to achieve full-scale implementation of mandatory e-filing” — with no year. Claims of a “second phase in 2028 with a turnover threshold” circulate in advisory commentary but are confirmed on no IRD page and should not be stated as fact.

If your structure sits inside a multinational group, read this alongside our analysis of the global minimum tax and HKMTT in Hong Kong, where the Part 4AA entity definition is worked through in more detail.

The exceptions: when a mandated e-filer may still file on paper

The obligation to file electronically is not absolute. Section 51AAC(2) of Cap. 112 permits the Commissioner “either generally or in a particular case, [to] accept a return furnished for the purposes of section 51(1)”, and section 51AAC(3) empowers him “by a means that the Commissioner considers appropriate, [to] specify the circumstances or conditions under which a return is to be accepted under subsection (2)”.

Note the drafting: unlike the powers in sections 51AA(5) and 51AA(6), which require notice published in the Gazette, the section 51AAC(3) power carries no Gazette requirement. That is precisely why the list of exceptions lives on IRD’s website rather than in the official gazette.

The six grounds for paper filing

IRD publishes them under the heading “Exception”: a phase 1 applicable entity is permitted to furnish the specified profits tax return in paper form in the following circumstances or conditions.

No.	Circumstance	Comment
1	The entity is being wound up under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) or amalgamated under the Companies Ordinance (Cap. 622)	Covers both voluntary and compulsory winding up
2	The entity has no record in the Business Register	Typical of structures that never obtained a business registration certificate
3	The entity has notified the Companies Registry or the Business Registration Office of its date of cessation	The notification must already have been given
4	The accounting period of the financial statement to be submitted with the return exceeds 12 months	Matters in practice on a first filing and on a change of accounting date
5	The 2025/26 return was issued on or before 31 March 2026; or the 2026/27 return is issued on or before 31 March 2027	This is why IRD dates the start of phase 1 to 1 April 2026
6	The submission is a re-filing of a return previously e-filed but subsequently found invalid	A technical case

A proviso that cancels much of the saving: “Despite the above exceptions, all required supplementary forms must be submitted electronically.”

How this shows up on the return itself

The 2025/26 BIR51 carries two new items:

•          Item 3.9: “Are you a specified person under section 51AAB of and Schedule 65 to the Inland Revenue Ordinance mandating to file this return in the form of an electronic record?”

•          Item 3.9.1: “If yes, do you qualify for filing this return in paper form under the circumstances or conditions specified by the Commissioner?”

On BIR52 the same questions appear as Items 2.8 and 2.8.1.

⚠️ A terminological inconsistency in IRD’s own material. The heading of the first condition on IRD’s page is neutral — “Condition 1: Entity being a Part 4AA entity of an MNE group”. But the sentence beneath it folds the label into the first condition alone: “The entity is a Part 4AA entity of an MNE group (phase 1 applicable entity) for the fiscal year.” Under section 2 of Part 2 of Schedule 65 the status arises only when both conditions are met. Interpretation should follow the Schedule, not the wording of the web page.

What happens if the form requirement is breached

Section 51AAC(1): “If an applicable requirement under section 51AA or 51AAB is not complied with in respect of a return, the Commissioner may disregard the return and treat it as not having been furnished for the purposes of section 51(1).”

This is the enforcement architecture of the regime, and it does not work the way most people expect. The duty to file electronically carries no offence of its own: section 80(2) does not mention section 51AAB at all. The mechanism is indirect — the Commissioner nullifies the wrongly-formatted return, the section 51(1) obligation is thereby left unsatisfied, and liability arises under section 80(2)(d): a fine at level 3 (HK$10,000) plus a further fine of treble the undercharged amount.

The practical point: a mandated entity that files on paper is not exposed to a “wrong format” penalty but to full liability for failing to furnish a return — and by the time that conclusion is reached, the filing deadline has usually long passed.

The three filing modes: paper, electronic and semi-electronic

IRD distinguishes three modes of filing a profits tax return, and the distinction runs not through the return alone but through three of its components at once: the return itself, the supplementary forms and the supporting documents.

Filing mode	BIR51/BIR52 return	Supplementary forms S1–S22	Supporting documents
Paper	4-page paper form	XML (electronic in every case)	Paper
E­lectro­nic	Electronic record	XML	iXBRL
Semi­-ele­ctronic	1-page paper form	XML	iXBRL

What a “simplified return” means in 2026

In IRD’s current usage “simplified Profits Tax Return” denotes not a small-business concession but a technical artefact of the semi-electronic mode. IRD’s footnote to the mode table: “A simplified Profits Tax Return (BIR51(ie)(ic) / BIR52(ie)(ic)) generated by the electronic filing of Profits Tax Return services under the BTP or TRP is required to be printed for signature and submission in paper form.”

In other words, under the semi-electronic mode the taxpayer completes the return online, the portal generates a one-page paper extract, that extract is printed, wet-ink signed and lodged on paper, while the supplementary forms and financial statements travel electronically.

⚠️ The claim that “small companies may file a simplified return” is wrong twice over. First, the “simplified return” is a semi-electronic artefact available to any non-mandated filer, not a size-based concession. Second, the former HK$2,000,000 gross income threshold that relieved small businesses from submitting supporting documents no longer applies.

Who may use which mode

Full electronic mode. On the taxpayer’s side, a BTP Administrator or a BTP Authorized User assigned “Profits Tax Matters” and holding one of the recognised signing capacities. On the adviser’s side, a service provider engaged under section 51AAD, acting through the TRP.

A material asymmetry: a tax representative acting as such gets only the Uploading, Completion and semi-electronicmodes under the Submission Service. A tax representative cannot electronically sign and submit a return in that capacity — appointment as a service provider is required.

Semi-electronic mode. Open to anyone outside mandatory e-filing. IRD: “Please note that the semi-electronic filing mode is not applicable to entities of in-scope multinational enterprise groups subject to mandatory electronic filing of Profits Tax returns.” The BIR51 notes repeat it: “Semi-electronic filing is not acceptable.”

Paper mode. Everyone else, plus mandated entities falling within one of the six exceptions. Even then all supplementary forms are filed electronically as XML, and a printed, signed Control List (IR1477) accompanies the paper return.

The years of assessment that can be filed electronically

Only returns for the years of assessment 2022/23 to 2025/26 can be filed electronically. IRD answers the direct question this way: “No. Only Profits Tax returns for the years of assessment 2022/23 to 2025/26 issued to a corporation/business can be filed electronically.”

The practical consequence for anyone catching up on overdue filings: a return for 2021/22 or an earlier year can only be filed on paper, even where the company is today a phase 1 applicable entity.

The IR1477 Control List and the signature requirements

IR1477 is the “Control List for the supplementary forms e-filed”, printed from the portal after the supplementary forms are uploaded. IRD’s requirements:

•          where the return is filed on paper, the Control List must be printed, signed and submitted together with the return;

•          “The person who signed the Control List must be the one signing the Profits Tax Return”;

•          in the electronic and semi-electronic modes the Control List need not be printed;

•          nothing may be hand-written on IR1477 except the tick in the declaration box, the full name of the service provider, the name and designation of the signatory, the signature and the date.

iXBRL: the taxonomy, the tools and the minimum tagging requirement

Under the electronic and semi-electronic modes, the financial statements and tax computation are attached in iXBRL, not PDF. IRD’s wording: “For electronic filing of Profits Tax return, the financial statements and tax computation to be uploaded should be prepared in inline eXtensible Business Reporting Language (iXBRL) format and in accordance with the IRD Taxonomy Package, unless exception applies.”

Current taxonomy and tool versions

IRD numbers the taxonomy not by version but by year edition. From 1 April 2026 the updated English and Traditional Chinese taxonomy editions and the corresponding data preparation tools are in use.

Component	Current version	Release date	Applicable years of assessment
IRD FS Taxonomy (English)	2025 edition	1 April 2026	2025/26
IRD FS-PE Taxonomy (English)	2025 edition	1 April 2026	2025/26
IRD TC Taxonomy (tax computation)	2025 edition	1 April 2026	2022/23 – 2025/26
iXBRL Data Preparation Tools, English, Windows	4.1.0.0	21 July 2026	2022/23 – 2025/26
iXBRL Data Preparation Tools, English, Mac	4.1.0.0	11 August 2026	2022/23 – 2025/26
iXBRL Data Preparation Tools, Traditional Chinese, Windows and Mac	3.1.0.0	11 August 2026	2023/24 – 2025/26

Two details that break the process for anyone unaware of them.

The financial statement taxonomy is year-specific; the tax computation taxonomy is not. The FS and FS-PE editions each apply to their own year of assessment, whereas iXBRL data files for tax computations “should be prepared and submitted using the latest edition of IRD TC Taxonomy” — so a single 2025 edition serves every year from 2022/23 to 2025/26.

The Windows and Mac releases diverged by three weeks. English version 4.1.0.0 for Windows shipped on 21 July 2026 but for Mac only on 11 August 2026. The 4.0.0.0 and 3.0.0.0 builds released on 1 April 2026 are marked obsolete.

Two tools: the Tagging Tool and the Template Tool

The Tagging Tool is the primary instrument. Businesses “can import their financial statements in Microsoft Word format and tax computations in Microsoft Excel format into the Tagging Tool and then tag the accounting and tax data for generating the iXBRL files”. The English Windows build additionally supports conversion of financial statements in Excel format.

The Template Tool is the simplified route. It is available to “small corporations or businesses with gross income not exceeding $5,000,000”, which enter figures and text into pre-defined templates where each item is already matched with a default tag.

⚠️ The HK$5,000,000 threshold is a gate to a simpler tool, not an exemption from iXBRL. There is no size-based exemption from iXBRL at all.

The minimum tagging requirement

IRD does not require every data item to be tagged. Its wording: “To ease the burden of corporations and businesses at the initial stage, the Department does not require corporations and businesses to tag all and every data item in their financial statements and tax computations.”

The mandatory floor — the “minimum tagging requirements” — comprises:

•          the statement of comprehensive income, profit or loss;

•          the statement of financial position;

•          notes to the financial statements — related party transactions;

•          notes to the financial statements — property, plant and equipment;

•          the main tax computation schedules: items with tax adjustments, the Depreciation Allowance / Industrial Building Allowance / Commercial Building Allowance schedule, and the detailed profit and loss account.

Separately and unconditionally the List of Mandatory Items applies: “In addition to the above minimum tagging requirement, corporations and businesses must tag and provide the values for the mandatory items as required by the List of Mandatory Items. Unlike the above-mentioned minimum tagging requirement, even though their financial statements or tax computations do not contain these mandatory items, they still have to tag and provide values for them” — monetary elements being tagged and presented as “0”.

The exception: PDF instead of iXBRL for the financial statements

The exception turns on the accounting standards applied, not on size. Where a business does not adopt full HKFRS, HKFRS for Private Entities or the SME-FRF & SME-FRS — that is, where it prepares its statements under other standards — it “may submit their financial statements in PDF format”. IRD adds that electronic submission of financial statements in PDF through the BTP or TRP “would only be allowed under exceptional circumstances”, and that “in any event, iXBRL data files for tax computations should still be prepared and submitted electronically”.

IFRS reporting is not treated as an exception: IRD states that “HKFRS is virtually identical to IFRS Accounting Standards” and permits the IRD Taxonomy Package to be used.

In short: iXBRL for the tax computation is universal for e-filers; iXBRL for the financial statements has an accounting-standards carve-out.

Technical constraints

•          iXBRL data files must not exceed 20MB and must not contain JavaScript.

•          Conformance with XBRL Specification 2.1, iXBRL 1.1 and the IRD iXBRL Style Guide is required.

•          All textual, financial and tax information, tagged or untagged, “should be embedded in the iXBRL data files as HTML text”.

•          A cover page for the tax computation is mandatory.

•          Validation results are released “within one working day”; where validation fails the uploaded files “will not be regarded as attached to the Profits Tax return”.

•          For supplementary forms the system retains a single archive: “At any time, only ONE Zip file for supplementary forms would be retained by the system for a tax return” — any re-upload must therefore carry the complete set.

Retention of iXBRL source data

IRD publishes no iXBRL-specific retention rule. The general obligation in section 51C applies: sufficient records for not less than seven years. Because section 51C(3) expressly covers records kept “in a non-legible form by means of a computer or otherwise”, the tagged files and the data behind them fall within section 51C on ordinary principles. That is an inference from the statutory wording, not an IRD statement — the Department has published nothing on the point.

The Business Tax Portal and the Tax Representative Portal: accounts and access

On 22 July 2025 IRD launched three new tax portals under eTAX — the Individual Tax Portal (ITP), the Business Tax Portal (BTP) and the Tax Representative Portal (TRP). Existing eTAX user profiles were migrated to the ITP.

eTAX itself was not retired — it is the umbrella brand. IRD describes the BTP and TRP as portals “under eTAX services”, and the entry point remains etax.ird.gov.hk. What was replaced is the former eTAX business account through which voluntary electronic filing of profits tax returns had run since April 2023. Every current IRD route to electronic filing now passes through the BTP or the TRP.

Who may open a BTP Business Account

Only a Responsible Person (RP) — a natural person in one of the following capacities — may register the business account:

Type of entity	Who may act as Responsible Person
Corporation	Director, company secretary, liquidator or provisional liquidator, or authorized repre­senta­tive in Hong Kong (non-Hong Kong companies only)
Partnership	A partner
Limited partnership fund	General partner, investment manager, or authorized repre­senta­tive — the last only where the general partner is another limited partnership fund or a non-Hong Kong limited partnership without a legal personality
Body of persons	The principal officer
Sole pro­prieto­rship	The sole proprietor

A corporate company secretary may register as RP “provided that the registration is completed by a natural person director of that Corporate Company Secretary”. Equally, a corporate partner may register a partnership that has no natural-person partner.

Bulk registration: the Bulk Upload service registers up to 500 BTP Business Accounts at once, but for corporations only; non-Hong Kong companies and companies in liquidation must be registered individually.

Role limits: a maximum of five BTP Administrators per account, with no limit on Authorized Users. Corporate registrations are checked: “the RP’s identity will be verified against the record kept by the Companies Registry”.

Authentication

The Responsible Person’s identity is verified through one of three digital mechanisms:

1.        iAM Smart;

2.        the Individual Tax Portal (ITP) TIN and password;

3.        a personal digital certificate.

A separate BTP User Account is needed by an individual before an appointment as Administrator or Authorized User can be activated. Three requirements here regularly come as a surprise:

•          “Before registering for a BTP User Account, an individual must possess an Individual Tax Portal (ITP) Account”;

•          the BTP username and password must differ from the ITP ones;

•          the BTP Username is permanent and cannot be changed;

•          the user must add the Business Registration Numbers of the businesses served to a “Serving Business List” before those businesses can appoint them.

The TRP: adviser roles

A TRP Business Account is opened by a BTP Administrator; a BTP Authorized User granted “Manage TRP Team” can then manage the teams. A BTP Administrator may appoint the following roles:

•          Tax Representative — split by subject matter: Profits Tax Matters, Certificate of Resident Status, Pillar Two Matters;

•          Service Provider — Filing of Profits Tax Return, Filing of Top-up Tax Notification / Top-up Tax Return;

•          Company Secretary;

•          Person managing the non-corporate Part 4AA Entity.

The no-account route

Where a business holds no BTP account, a person it has appointed can still use the Uploading Service by entering the profits tax file number and the Return Identification Number (RIN) printed on the paper return. However, “The Completion and Submission Services cannot be accessed through this approach.”

A service provider not appointed through the BTP can self-engage a client within the TRP using the Business Registration Number and RIN.

⚠️ Plan the registration well ahead. The chain ITP → BTP User Account → appointment as administrator → BTP Business Account registration → TRP Business Account opening involves several steps with identity verification and a Companies Registry check. Starting it a week before the filing deadline is very nearly a guaranteed default — and for a tax representative it also forfeits block extension, which from April 2026 is available only through the TRP.

If you are dealing with the associated employer obligations in the same portal, our guide to payroll and employer obligations in Hong Kong covers the BIR56A and IR56B forms and their deadlines.

Who signs the return: sections 56, 56AA and 57

The list of persons who may sign a profits tax return is fixed not by the electronic filing rules but by the substantive provisions of Cap. 112 on who is answerable.

Section 57(1) — “Principal officer to act on behalf of a corporation or body of persons” — identifies who is answerable for doing everything the Ordinance requires of a corporation or body of persons:

•          (a) for a corporation that is an open-ended fund company, “any director or investment manager or the provisional liquidator or liquidator of the corporation”;

•          (b) for any other corporation, “the secretary, manager, any director or the provisional liquidator or liquidator of the corporation”;

•          (c) for a body of persons, its principal officer.

Section 56 places the burden on a partnership’s precedent partner, and section 56AA on the general partner, investment manager or authorized representative of a limited partnership fund.

IRD’s administrative list

IRD reproduces the same list identically across three of its pages:

Form	Who may sign
BIR51	Director; secretary; manager; investment manager (open-ended fund companies only)
BIR52	Precedent partner; proprietor (only where the business changed from a partnership to a sole pro­prieto­rship during the basis period); executor of the deceased person; agent or manager (only where there is no resident proprietor or partner in Hong Kong); general partner of an LPF; authorized repre­senta­tive as defined in section 2 of the Limited Partnership Fund Ordinance (Cap. 637); investment manager of an LPF; principal officer of the body of persons

The list tracks sections 56, 56AA and 57 exactly — so the “director, manager or secretary” question is answered by section 57(1), not by anything in the e-filing provisions.

How an electronic return is signed

IRD: “Authorized signer should sign the return using Individual Tax Portal account, personal digital certificate issued by a recognized certification authority or ‘iAM Smart’ account with digital signing function.”

The equivalence is stated directly: “For the purpose of filing tax returns under the Inland Revenue Ordinance, either digital signature or password is accepted as an alternative to a hand-written signature. A person who files Profits Tax return by using a digital signature or password will be treated as having signed the return and is accountable for the accuracy of the information submitted.”

The underlying provision is section 51(5) of Cap. 112: a return purporting to be furnished on behalf of a person is deemed to have been furnished by that person unless the contrary is proved, “and any person signing any such return, statement, or form shall be deemed to be cognizant of all matters therein”.

The service provider: the only route to an organisational signature

Section 51AAD(1): “A taxpayer may, in a case specified by the Commissioner, engage a service provider to furnish a return under section 51(1) for or on behalf of the taxpayer.”

The service provider’s obligations:

•          51AAD(2): in furnishing the return it must comply with all applicable requirements under sections 51AA and 51AAB;

•          51AAD(3): before the return is furnished it must obtain from the taxpayer a confirmation “in a form specified by the Commissioner” that the information contained in the return is correct and complete to the best of the taxpayer’s knowledge and belief;

•          51AAD(4): it must retain that confirmation for not less than 7 years from the date the return is furnished;

•          51AAD(5): “To avoid doubt, despite the engagement of a service provider under subsection (1), the taxpayer is not relieved from the taxpayer’s obligation under section 51(1).”

The Commissioner’s specified form of confirmation is IR1476, “Confirmation for Engagement of Service Provider to Furnish Return”.

The decisive practical advantage of service provider status: IRD states that “other than the aforesaid signing methods, the service provider may use an organizational certificate issued by a recognized certification authority”. This is the only route by which an organisation, rather than a named individual, signs the return.

Handling IR1476 in practice

•          The form is signed by the client in each year of assessment, not once and for all.

•          It is retained for not less than 7 years from the date the return is furnished.

•          On a paper filing, the signed IR1476 accompanies the return.

•          On an electronic or semi-electronic filing, “uploading of Form IR1476 is not required”, but it must be kept and produced on request.

•          Engaging a service provider has been possible since 1 April 2022 and “irrespective of the mode in which a return is furnished (that is, paper or electronic mode)”.

⚠️ Engaging a service provider is not a “reasonable excuse”. Section 80(2AA) of Cap. 112 says so expressly: “For the purposes of subsection (2)(a), (b), (c) and (d), engaging a service provider (as defined by section 51AAD(8)) under section 51AAD(1) does not in itself constitute a reasonable excuse.” An identical provision, section 82A(1AA), applies to additional tax.

Correcting a return already filed

Hong Kong has no amended return. IRD: “Please give a duly signed written notice to the Commissioner of Inland Revenue with particulars including your name, capacity, name of the corporation/business, file number, the relevant year of assessment and details of the amendment or supplement. You should not use the 4-page paper Profits Tax return for this purpose.”

Note the words “4-page”: the prohibition is aimed at the full paper return, not at the one-page simplified form BIR51(ie)(ic) / BIR52(ie)(ic), which is how a semi-electronic filing is made in the first place.

What changed in the 2025/26 return

IRD publishes an annual list of changes to the paper return forms. For 2025/26 that list contains exactly two items.The page is headed “Major Changes in 2025/26 Paper Profits Tax Return [BIR51, BIR52 & BIR54]” and is introduced with the sentence: “The following Items are added/amended in the paper Profits Tax Returns this year.”

Change	BIR51	BIR52	BIR54
Declaration of specified person status under section 51AAB and Schedule 65	Items 3.9 and 3.9.1	Items 2.8 and 2.8.1	None
Amount of foreign tax paid claimed as a unilateral tax credit	Item 10.20	Item 10.20	None

The first item, verbatim: “Items 3.9 to 3.9.1 of BIR51 and Items 2.8 to 2.8.1 of BIR52 are added to indicate whether the taxpayer is a specified person under section 51AAB of and Schedule 65 to the Inland Revenue Ordinance (i.e. Part 4AA Entity) mandating to file the return in the form of an electronic record; and whether the taxpayer is qualified for filing the return in paper form under the specified circumstances or conditions. If the taxpayer is a specified person and does not fall within the exception cases where filing of returns in paper form is still permitted, the return must be filed in the form of an electronic record.”

The second, verbatim: “Item 10.20 of BIR51 and Item 10.20 of BIR52 are added to state the amount of foreign tax paid claimed as a unilateral tax credit. If not applicable, please enter ‘0’.”

⚠️ BIR54 did not change at all for 2025/26 — despite being named in the title of the changes page. Practitioners routinely assume parity across the three forms; here there is none.

Two anomalies in IRD’s 2025/26 material

First: Item 10.20 has no note. In the HTML Notes and Instructions to BIR51 the note numbering runs “…10.17, 10.18, 10.21, 10.22…” — there is no note for Item 10.19 or Item 10.20 at all. IRD added the box to the form and described it on the changes page but did not write a corresponding instruction into the Notes. Given that Item 10.20 asks for “the amount of foreign tax paid claimed as a unilateral tax credit” with no guidance on its interaction with section 50 credits or with Item 3.4 (relief from double taxation), the gap matters in practice. In fairness, noteless items in Part 10 are not new — Items 10.2 and 10.10 have no note either — so this is a long-standing feature of the Notes rather than an anomaly created by the new box.

Second: the Notes carry a stale edition stamp. The BIR51 Notes page ends with “(4/2025)” — the only date marking on the page — while the same page states that mandatory electronic filing “has come into operation” from 1 April 2026 and covers years of assessment “from 2022/23 to 2025/26”. By content this is unambiguously the 2025/26 edition; the stamp is not. The edition stamp should not be relied on for dating.

How Item 10.20 connects to provisional tax

Item 10.20 does not stand alone. Section 63H(1E) of Cap. 112, added by Ordinance No. 17 of 2022, provides: “In computing the amount of provisional profits tax for a year of assessment, any credit or deduction allowed under section 50 for the preceding year of assessment is to be taken into account.”

A unilateral tax credit entered at Item 10.20 therefore affects not only the current assessment but the following year’s provisional charge. An error in that box replicates itself two years forward.

The practical side of foreign tax credits and of proving tax residence for treaty purposes is covered in our guide to the Hong Kong certificate of resident status and the IRD criteria.

The anatomy of BIR51: thirteen parts and what each requires

BIR51 comprises lettered front sections A to G and thirteen numbered Parts. The lettered sections carry the legal framing; the Parts carry the data.

Section	Content
A	Personal Information Collection Statement
B	Introduction: defines “relevant year”; requires HKFRS or IFRS statements; all amounts in HK$ excluding cents
C	Notice for completion under section 51(1). Note C1 — assessable profits; C2 — basis period; C3 — electronic filing of supplementary forms S1–S22; C4 — electronic and semi­-ele­ctronic filing
D	Keeping business records: 7 years, fine up to HK$100,000
E	Offences and penalties
F	Remuneration paid to employees and non-employees
G	How to complete the Parts

Part	Heading	Note in the Notes?
1	Statement of Assessable Profits or Adjusted Loss	Yes, at length
2	Tax Liability or Repayment	Yes (2.1, 2.2, 2.3)
3	Specified Transactions and Matters	Yes (3.1–3.5, 3.8, 3.9, 3.9.1)
4	Details of the Corporation	Yes
5	Return Form Language	No
6	Authorized Repre­senta­tive	Yes
7	General Matters	Yes
8	Transactions For / With Non-Residents	Yes
9	Details of Supplementary Form(s) Uploaded	Yes (9.1–9.22)
10	Tax Data	Yes, except 10.2, 10.10, 10.19 and 10.20
11	De­precia­tion Allowances Claimed	No
12	Financial Data	Yes (12.1–12.23)
13	Declaration	Yes

The gaps in the Notes are not confined to Item 10.20. Parts 5 and 11 exist on the form but attract no note at all. In Part 3 the notes cover Items 3.1 to 3.5 and then jump to 3.8 — there are no notes for Items 3.6 and 3.7. In Part 10 the notes cover Items 10.1, 10.3–10.9, 10.11–10.18, 10.21 and 10.22 — so Items 10.2, 10.10, 10.19 and 10.20 have no note, even though Item 10.2 (offshore profits from business attributable to internet use or processing arrangements, with sub-items 10.2.1 and 10.2.2) and Item 10.10 (approved charitable donations deduction) both appear on the form.

Parts 10, 11 and 12 each carry the same instruction on the face of the form: “(Complete all items. If NIL, enter ‘0’.)”

Part 13: the declaration

The note reads: “The return must be signed by either the taxpayer or the engaged service provider. If it is signed by the service provider, the service provider must obtain a confirmation from the taxpayer stating that the information contained in the tax return, any required supplementary forms and the Supporting Documents is correct and complete to the best of the taxpayer’s knowledge and belief. Please download a ‘Confirmation for Engagement of Service Provider to Furnish Return’ (IR1476) from the Department’s web site for completion and submission together with the tax return.”

Completion errors on IRD’s own list

IRD publishes its own “Filing tips for 2025/26 Profits Tax Return”. These are not third-party commentary but the Department’s direct instructions.

The dos (IRD’s list)

•          Complete the return fully and properly, following the requirements in the Notes and Instructions strictly and providing the schedules and supporting documents specified there — for example, documents supporting a claim of tax credit.

•          Report Assessable Profits, not Net Assessable Profits, at Item 1.1 (BIR51 and BIR52). This is the first substantive item on IRD’s list and the most frequent error.

•          Provide the 6-digit HSIC industry code (Hong Kong Standard Industrial Classification) at Item 4.3 of BIR51 or Item 3.3 of BIR52. The latest version of the classification is maintained by the Census and Statistics Department.

•          Quote the file number printed on the return if any supporting documents are submitted.

•          State the practising certificate number of the certified public accountant (practising) who signed the auditor’s report whose certified copy is filed with the return, at Item 7.1.2 of BIR51. Where the report does not carry that number, IRD suggests requesting it from the accountant or obtaining it from the official website of the Accounting and Financial Reporting Council.

•          Submit the audited financial statements bearing a wet-ink signature, or a photocopy of the signed accounts duly certified true by a director, principal officer or certified public accountant.

•          Complete the supplementary forms electronically using the latest version of Adobe Acrobat Reader, and save the completed forms for your own record.

•          Make sure the return and the supplementary forms are of the same year of assessment.

•          Print and sign the paper Control List (IR1477) where supplementary forms are due and the return itself is not filed electronically or semi-electronically.

•          Ensure the return and form IR1477 are signed by the same designated person with wet ink.

•          Provide the tax data, depreciation allowances claimed and financial data in Parts 10 to 12 of BIR51 (Parts 10 to 11 of BIR52) in Hong Kong dollars, not in foreign currency.

•          Tick the appropriate box at Part 13 of BIR51, Part 12 of BIR52 or Part 9 of BIR54.

•          Delete all inappropriate capacities, or fill in the capacity, at Part 13 of BIR51, Part 12 of BIR52 or Part 9 of BIR54 before signing.

•          Complete Items 2.4.3 and 2.4.4 of BIR54 and supply the information required by the Notes and Instructions on a separate sheet where the “Yes” box is ticked at Item 5.6 of BIR54.

The don’ts (IRD’s list)

•          Do not print blank supplementary forms for completion by hand.

•          Do not hand-write on form IR1477 except for these items in Section 2 (Declaration and Signature): a tick in the appropriate declaration box; the full name of the service provider engaged, if applicable; the name and designation of the person signing; and the signature and date of signing.

•          Do not amend any data in the XML file of supplementary forms before submission.

•          Do not tick the boxes at Part 9 of BIR51 and BIR52 if no supplementary forms are being submitted.

•          Do not leave more than one capacity undeleted at Part 13 of BIR51 before signing.

•          Do not submit the paper return, audited financial statements or form IR1477 bearing a digital signature, name chop or signature chop only.

⚠️ The “000000” instruction is not on the filing tips list. The direction that “000000” is entered as the industry code where there was no business activity in the basis period sits in note (4) to Part 4 of the BIR51 Notes and Instructions, not on the filing tips page. The two documents should not be conflated when citing.

Two traps in the Notes themselves

Items 2.1 and 2.2 require the taxpayer’s own computation to add the following year’s provisional profits tax and deductthe current year’s. In practice one of the two legs is routinely omitted.

Item 12.1, “Gross income”, means “ALL TYPES OF INCOME … including proceeds from the sale of capital assets and other non-taxable income, whether or not derived from the principal business activity”. It is deliberately wider than the turnover figure at Item 12.2, and entering turnover there is an error.

Before completing Part 1 it is worth confirming that the source question has been answered correctly — see our analysis of territorial taxation and offshore status in Hong Kong.

Supplementary forms S1–S22: what accompanies the return

There are currently twenty-two supplementary forms to the profits tax return. All of them are filed electronically and only electronically — irrespective of the mode in which the return itself is filed.

IRD’s wording: “All supplementary forms must be submitted electronically through the electronic filing of Profits Tax Return services under the Business Tax Portal (BTP) or Tax Representative Portal (TRP), irrespective of the filing mode of Profits Tax Return for any year of assessment from 2020/21 to 2026/27 (both inclusive).”

⚠️ Note the closed range. The requirement is expressed as covering the years of assessment 2020/21 to 2026/27, not open-endedly. IRD has not yet published how it will be extended to 2027/28.

Form	Part 9 item	Trigger / regime
S1	9.1	Person electing two-tiered rates where connected entities exist. Not required where there is no connected entity, or where the company belongs to a group containing a company listed on the SEHK
S2	9.2	Section 1 — transactions with non-resident associated persons and with other parts of the non-resident person; section 2 — APA under s.50AAP; section 3 — group obliged to file a CbC report; section 4 — Part 4AA entity of an in-scope MNE group
S3	9.3	R&D deduction under s.16B; receipts and sale proceeds from IP generated from R&D
S4	9.4	Energy efficient building installation, s.16I
S5	9.5	Ship-owner
S6	9.6	Professional reinsurer, s.14AB
S7	9.7	Authorized captive insurer, s.14AB
S8	9.8	Qualifying corporate treasury centre, s.14D(2)
S9	9.9	Qualifying aircraft lessor, s.14H(2)
S10	9.10	Qualifying aircraft leasing manager, s.14J(2)
S11	9.11	Qualifying ship lessor, s.14P(2)
S12	9.12	Qualifying ship leasing manager, s.14T(2)
S13	9.13	Specified insurer, s.14AB
S14	9.14	Licensed insurance broker company, s.14AB
S15	9.15	Persons deriving eligible carried interest, Schedule 16D
S16	9.16	Qualifying ship agent, s.14ZD(4)
S17	9.17	Qualifying ship manager, s.14ZM(4)
S18	9.18	Qualifying ship broker, s.14ZV(4)
S19	9.19	Taxation of specified forei­gn-sou­rced income (FSIE): a constituent entity of an MNE group with income accrued or received in Hong Kong on or after 1 January 2023 (interest, dividends, equity disposal gains, IP income) or 1 January 2024 (other disposal gains)
S20	9.20	Tax concession for a family-owned investment holding vehicle, Schedule 16E
S21	9.21	Tax Certainty Enhancement Scheme for onshore equity disposal gains, Schedule 17K
S22	9.22	Tax concession for intellectual property income (patent box)

Two exclusions that are easy to overlook

S19 is not required where the only outcome was a disposal loss on a sale outside Hong Kong — that loss is instead claimed in the tax computation.

S1 is not required for a listed group. The form is required only of a person who elected the two-tiered rates and has connected entities; where there is no connected entity, or where the company belongs to a group containing a company listed on the Stock Exchange of Hong Kong, no form is due.

S2 has become the point where transfer pricing and Pillar Two intersect. Section 4 of S2 is addressed to a Part 4AA entity of a group within the global minimum tax — the very entity obliged to file electronically under Schedule 65. For more on Hong Kong transfer pricing, see our analysis of Part 8AA of Cap. 112 and the master and local file requirements.

If you are claiming the R&D deduction through S3, our guide to Hong Kong profits tax deductions and incentives works through sections 16E and 16EA and the enhanced rates. If your company is claiming the patent box through S22, see the 5% rate on IP income in Hong Kong.

Supporting documents: the HK$2,000,000 threshold no longer applies

This is the most underreported change to the regime, and secondary sources have largely missed it. Corporations and partnerships with gross income of not more than HK$2,000,000 were formerly permitted to file without supporting documents. That concession has been withdrawn.

IRD’s wording under “Warm Reminder on Profits Tax Return Filing Requirements”: “If you have any gross income during the basis period, you must submit your profits tax return together with all supporting documents (including financial statements and tax computation). Small corporations and businesses with gross income not exceeding HK$2 million will no longer be permitted to file their profits tax returns without supporting documents.”

IRD carries the same position at the very top of its return-completion page:

“(1) ALL supporting documents (including financial statements and tax computations) must be submitted together with the Profits Tax Returns if corporations and partnership businesses have gross income during the basis period; (2) ALL required supplementary forms, if appropriate, must be filed electronically.”

And further: “If corporations and partnership businesses have any gross income during the basis period, they are required to furnish their returns together with all the supporting documents except in those cases mentioned in paragraph (4) below.”

Corroborating negative evidence. The current HTML Notes and Instructions to BIR51 contain no occurrence of “2,000,000”, “2 million”, “need not” or “dormant”. The former concession has been removed from the Notes altogether.

The year of assessment from which the threshold was withdrawn

The year of assessment 2022/23. The date is fixed by IRD’s press release of 3 April 2023, issued on the day the 2022/23 returns were bulk-issued: “Starting from this year, all corporations and businesses, regardless of the amount of their gross income and the mode of return filing, must submit their profits tax returns together with all supporting documents (including financial statements and profits tax computations).”

⚠️ The IRD reminder page that states the prohibition is itself out of date as to the filing route. It still describes electronic filing “under the eTAX services provided at GovHK” — the regime replaced by the BTP and TRP on 22 July 2025. It remains good authority for the supporting-documents rule, but it should not be read as a current description of how a return is filed.

What is still relieved: audited financial statements

The threshold on supporting documents has gone, but the audit exceptions have not. Paragraph (4) of the IRD page preserves three cases in which audited financial statements need not accompany the return:

Case	Condition
(a) Dormant companies	Within the terms of the Companies Ordinance (Cap. 622)
(b) Companies incorporated in a jurisdiction whose laws do not require an audit	And where an auditor’s report has not in fact been prepared
(c) Hong Kong branch of a foreign company	Provided four items are supplied with the return: (i) the place of incorporation of the foreign company; (ii) whether the laws of that country require a statutory audit of the company’s world-wide financial statements; (iii) whether that audit has been conducted; (iv) a brief summary of the financial and accounting records maintained by the Hong Kong branch

The practical point for a dormant company: the exception at (a) covers the audit only. If a dormant company had any gross income in the basis period, the requirement to supply supporting documents formally survives; if it had none, the condition in paragraph (1) is simply not met.

Our guide to mandatory annual compliance for Hong Kong companies in 2026 works through the audit and annual filing requirements as a whole.

Notification of chargeability: section 51(2) and form IR6168

The duty to tell IRD that you are chargeable arises whether or not a return has been issued to you.

Section 51(2) of Cap. 112: “Every person chargeable to tax for any year of assessment shall inform the Commissioner in writing that he is so chargeable not later than 4 months after the end of the basis period for that year of assessment unless he has already been required to furnish a return under the provisions of subsection (1).”

The notification forms

Form IR6163 has nothing to do with this — it is the “Request for Employer’s Return of Remuneration and Pensions”. There is no combined “Salaries Tax/Profits Tax” notification form; IRD maintains three separate ones:

Form	Official title
IR6168	Notification of Chargeability to Profits Tax
IR6167	Notification of Chargeability to Salaries Tax
IR6129	Notification of Letting of Properties

Form IR6168 itself carries the edition code IR6168 (12/2022) and, notably, does not restate the four-month period — that period exists only in section 51(2) and in IRD’s guidance.

IRD’s key qualification: “before the set-off of any loss brought forward”

IRD’s gloss for corporations and partnerships reads: “It is important to note that if a business commences or recommences to earn assessable profits (before the set-off of any loss brought forward), the business must inform the IRD in writing within 4 months after the end of the basis period (the accounting period) for that year of assessment.”

The parenthesis carries the weight. A company with accumulated losses that entirely absorb the year’s profit still has a section 51(2) obligation. The word “recommences” extends the rule to dormant companies that restart trading.

The eighteen-month gap that creates the exposure

The first profits tax return is issued roughly eighteen months out. GovHK’s wording: “Generally, a newly registered business will receive its first Profits Tax Return some 18 months after the date of commencement of business or the date of incorporation.”

Set that against the four-month period in section 51(2) and a classic trap emerges. A company incorporated in June 2025 with a first year end of 31 March 2026 will not see a return until roughly late 2026 — but its section 51(2) deadline expired on 31 July 2026. The saving in section 51(2), “unless he has already been required to furnish a return”, does not help: at four months past the basis period end, no return had been required.

⚠️ IRD nowhere reconciles the two timelines. The eighteen-month issuance practice is documented on GovHK, and the section 51(2) duty on IRD’s chargeability page; neither cross-refers to the other. The conclusion for a new company: if the first basis period produced assessable profits before loss set-off, file IR6168 rather than waiting for a return.

Liability: “A person who fails to comply with the requirement to notify chargeability might be prosecuted under section 80(2) or subject to Additional Tax under section 82A of the Ordinance.” The offence in section 80(2)(e) — “fails to comply with section 51(2)” — carries a fine at level 3 plus a further fine of treble the undercharged amount.

The mirror obligation is notice of cessation. Section 51(6): a person who ceases to carry on a trade, profession or business must inform the Commissioner in writing within 1 month of the cessation. The deregistration process and the IRD Notice of No Objection are covered in our guide to closing a Hong Kong company in 2026.

Provisional profits tax and holding it over

The return is not only a report on the year past — it is the basis for the following year’s provisional charge. Items 2.1 to 2.3 of BIR51 require the taxpayer’s own computation to add next year’s provisional profits tax and deduct the current year’s.

Section 63G of Cap. 112: every person chargeable to profits tax under Part 4 for the year of assessment commencing 1 April 1975 or any succeeding year “shall be liable to pay provisional profits tax in respect of that year of assessment in accordance with this Part”.

Section 63H(1): “Subject to subsections (1E), (2), (3) and (4), provisional profits tax in respect of any year of assessment shall be payable by reference to the amount of assessable profits for the year preceding the year of assessment, but after the set off of any loss available for set off in the year of assessment under section 19 or 19C.”

Supporting machinery: section 63H(3) — where the basis period is not twelve months the assessor may estimate; section 63H(4) — in commencement cases the assessor may estimate for that year and the succeeding year; section 63H(7) — the Commissioner’s notice fixes the due date; section 63H(8) — provisional tax is deemed tax charged and the notice a notice of assessment for the purposes of Part 12.

Section 63HA modifies section 63H for connected entities: the two-tiered rates are switched off for the provisional charge unless an exemption has been granted.

Section 63I: a notice for payment of provisional profits tax may be given separately or included in a notice of assessment to profits tax.

Section 63K sets the set-off cascade: the Commissioner must, not later than when he gives notice of assessment to profits tax, apply the provisional tax paid first (a) against the profits tax payable for that year of assessment, then (b) against the provisional profits tax payable for the succeeding year of assessment, and must refund the balance not so applied.

Holding over payment: section 63J

The application deadline is in section 63J(1) and the grounds are in section 63J(2). This is a common confusion in reference material.

Section 63J(1) permits a written application to the Commissioner lodged not later than: (a) 28 days before the day by which the provisional profits tax is to be paid; or (b) 14 days after the date of the notice for payment of provisional profits tax under section 63H(7) — whichever is the later.

The holdover runs until the person is required to pay profits tax for that year of assessment; on ground (e), until the earlier of (i) the determination or settlement of the objection under section 64(3), or (ii) the date profits tax for that year falls due.

The six grounds

Ground	Provision	Content
Fall in profits	63J(2)(a)	The assessable profits for the year of assessment are, or are likely to be, less than 90% of the preceding year’s profits or of the estimated sum on which provisional tax was computed
Self-employed MPF contributions	63J(2)(a­b)	The person has paid or is likely to pay, during the year, mandatory contributions as a self-employed person under the Mandatory Provident Fund Schemes Ordinance (Cap. 485) which (i) are deductible under section 16AA and (ii) exceed or are likely to exceed the amount specified in Schedule 3B for the preceding year
Loss brought forward misstated	63J(2)(b)	The amount of any loss brought forward for set off under section 19 or 19C has been omitted or is incorrect
Cessation	63J(2)(c)	The person has ceased, or will cease before the end of the year, to carry on the trade, profession or business, and the profits assessable under section 18D are, or are likely to be, less than the preceding year’s
Personal assessment	63J(2)(d)	The person has elected to be personally assessed under Part 7 for that year and personal assessment is likely to reduce the liability
Objection to the prior year	63J(2)(e)	The person has objected under section 64 to the profits tax assessment for the year preceding the year of assessment

There are six grounds, not five. Ground (ab), added by Ordinance No. 20 of 2018, is routinely overlooked because it cannot apply to a corporation — self-employed MPF contributions arise only for a person filing BIR52 or reporting on BIR60. That is why much of the reference literature speaks of “five grounds” — including, tellingly, the GovHK page on holding over provisional tax. Work from the text of section 63J(2), not from a paraphrase of it.

Extension of the application deadline is available on one ground only. Section 63J(2B) allows the Commissioner to extend time for ground (ab); there is no general extension power for the other five.

Note the asymmetry in effect: on grounds (a) to (d) the holdover runs until profits tax falls due; on ground (e) it runs to the earlier of the determination of the objection and the profits tax due date.

Payment in two instalments

Provisional tax is generally demanded in two instalments. IRD confirms the structure: “Clearly shown on the first page are important details such as the total amount of tax payable and the respective amounts payable under the 1st and 2nd instalments. The due date and dates of the instalments are printed in red.”

Partial holdover is available: “If the provisional tax is payable by two instalments and the first instalment has been settled by the due date, an application for holding over of the whole or part of the second instalment may be made.”

⚠️ The “75% / 25%” split appears in no official source. It is printed on individual demand notes and repeated in advisory literature, but it is stated neither on IRD’s pages nor in Cap. 112. It should not be relied on as a rule; check the actual split on your own demand note.

The mechanics of challenging an assessment and holding over tax in dispute are covered in detail in our guide to disputing an IRD assessment in 2026: objections, the Board of Review and holding over the tax in dispute.

Profits tax rates and the one-off 2025/26 reduction

The return contains no calculation of tax at a rate — the rate is applied by IRD on assessment. But the choice of rate regime is declared in the return, through supplementary form S1.

The two-tiered rates: Schedules 8A and 8B

The two-tiered rates are set not by a section but by two Schedules to Cap. 112.

Schedule 8A — “Two-tiered Rates of Profits Tax — Persons other than Corporations”: “For a year of assessment commencing on or after 1 April 2018, profits tax is chargeable in respect of each trade, profession or business — (a) at the rate of 7.5% on the section 14 assessable profits from the trade, profession or business up to $2,000,000; and (b) at the rate of 15% on any part of the section 14 assessable profits over $2,000,000.”

Schedule 8B — “Two-tiered Rates of Profits Tax — Corporations”: “For a year of assessment commencing on or after 1 April 2018, profits tax is chargeable — (a) for a corporation — (i) at the rate of 8.25% on section 14 assessable profits up to $2,000,000; and (ii) at the rate of 16.5% on any part over $2,000,000; and (b) for a corporation that is a partner in a partnership — (i) at the rate of 8.25% on the net share of section 14 assessable profits concerned up to the threshold; and (ii) at the rate of 16.5% on any part over the threshold.”

The threshold for a corporate partner is proportionate. Schedule 8B, section 1: “threshold, for a corporation that is a partner in a partnership, means $2,000,000 multiplied by the ratio at which the corporation shares the profits or losses of the partnership during the basis period for the year of assessment concerned.”

Schedule 8 carries the standard corporate rate outside the two-tiered regime: “For the year of assessment 2008/09 and for each year after that year — 16½%.”

Category	First HK$2,000,000	Above HK$2,000,000	Source
Corporation, two-tiered regime	8.25%	16.5%	Schedule 8B
Corporate partner, two-tiered regime	8.25% up to the proportionate threshold	16.5%	Schedule 8B, s.1
Person other than a corporation, two-tiered regime	7.5%	15%	Schedule 8A
Corporation outside the two-tiered regime	16.5% throughout	—	Schedule 8

Connected entities: sections 14AAB and 14AAC

Section 14AAB defines a connected entity: an entity is a connected entity of another if (a) one has control over the other; (b) both are under the control of the same entity; or (c) where the first is a natural person carrying on a sole proprietorship, the other is the same person carrying on another sole proprietorship. The control tests (more than 50%) sit in section 14AAB(2).

Separately, section 14AA(2) provides: “For the purposes of section 14AAB(1)(c), if a natural person carries on more than one sole proprietorship business, the person is taken to be a separate entity in relation to each sole proprietorship business.” Section 14AA is headed “Interpretation” and supplies the definitions for sections 14AAB and 14AAC.

Section 14AAC contains the switch-off and opt-back-in mechanism:

•          14AAC(1)–(3): where the entity has a connected entity at the end of the basis period, the references to Schedules 8A and 8B are replaced by references to the standard rate and the Schedule 8 rate — that is, the two-tiered regime is switched off by default;

•          14AAC(4): “However, the Commissioner may exempt an entity from subsection (2) for a specified year of assessment if the entity has elected in writing to be so exempted”;

•          14AAC(5): “The election, once made, is irrevocable”;

•          14AAC(6): the exemption is unavailable to entity A if, at the end of A’s basis period, A is a connected entity of entity B and B has already been exempted for that year.

The practical effect: within a group of connected entities, exactly one may use the two-tiered rates, and its election cannot be reversed. That election is the subject of supplementary form S1.

The one-off reduction for 2025/26

The mechanism is section 100 of Cap. 112, “Reduction of taxes”, operating through Schedule 43.

Section 100(2) sets the formula: the amount of a person’s profits tax for a specified year of assessment is reduced by the lesser of (a) the prescribed percentage of the tax and (b) the prescribed amount.

Schedule 43, entry “For the year of assessment 2025/26” (added by Ordinance No. 2 of 2026, section 6):

Tax	Prescribed percentage	Prescribed amount
Salaries tax	100%	HK$3,000
Profits tax	100%	HK$3,000
Tax under personal assessment	100%	HK$3,000

Property tax is not on the list. By comparison, the 2024/25 reduction was also 100% but capped at HK$1,500.

Application is “per case”. The Government press release describes the concession as “a one-off 100 per cent reduction of salaries tax, tax under personal assessment and profits tax for the year of assessment 2025/26, subject to a ceiling of $3,000 per case”. Section 100(3) adds, for partnerships: “For a trade, profession or business carried on by a partnership, the reduction under subsection (2) applies to the tax chargeable on the whole of the net assessable profits of the trade, profession or business”, whether or not any partner has elected personal assessment.

Read with section 14AA(2) — each sole proprietorship being a separate entity — this means the ceiling applies to each case, not once per taxpayer across several businesses.

⚠️ There is no other change to profits tax rates for 2025/26. Ordinance No. 2 of 2026 is cited exactly six times in the consolidated text of Cap. 112, and all six citations fall within four provisions: section 31 (child allowance), Schedule 3C (the self-education expenses ceiling), Schedule 4 (personal allowance tables) and Schedule 43. It touches none of Schedules 8, 8A or 8B. Schedule 8 still reads “16½%” from 2008/09, and Schedules 8A and 8B still read “for a year of assessment commencing on or after 1 April 2018”.

Liability: sections 80, 82 and 82A

Hong Kong’s return-related liability regime runs along three parallel routes which are mutually exclusive on the same facts.

Route	Provision	What must be shown	Maximum sanction
Prosecution for non-co­mpliance	s.80(2)	Absence of reasonable excuse	Fine at level 3 (HK$10,000) + a further fine of treble the undercharged amount
Prosecution for wilful evasion	s.82	Intent to evade	Summarily: level 3 + treble tax + 6 months; on indictment: level 5 (HK$50,000) + treble tax + 3 years
Additional tax in lieu of prosecution	s.82A	Absence of reasonable excuse	Additional tax not exceeding treble the undercharged amount

Section 80: non-compliance without reasonable excuse

Section 80(2) covers, among other things: (a) making an incorrect return by omitting or understating; (b) making an incorrect statement in connection with a claim for a deduction or allowance; (c) giving incorrect information affecting liability to tax; (d) failing to comply with the requirements of a notice given under section 51(1); (e) failing to comply with section 51(2). The sanction is “a fine at level 3 and a further fine of treble the undercharged amount”.

Section 80(2A) allows the court to order a convicted person to comply with the section 51(1) notice within a specified time. Section 80(2B): failure to comply with such an order is a distinct offence carrying a fine at level 4 (HK$25,000).

Section 80(1A) — breach of the section 51C record-keeping duty: a fine at level 6 (HK$100,000). The BIR51 notes repeat it: “Failure to keep sufficient records may result in a fine of up to $100,000.”

⚠️ Section 80(1A) is level 6, not level 5. This is the most frequent error in reference material on Hong Kong penalties.

Section 80(3) — the limitation period: “No person shall be liable to any penalty under this section unless the complaint concerning such offence was made in the year of assessment in respect of or during which the offence was committed or within 6 years after the expiration thereof.”

Section 80(5) is not a limitation provision but a compounding power: “The Commissioner may compound any offence under this section and may before judgment stay or compound any proceedings thereunder.”

Section 82: wilful evasion

Section 82(1) covers seven limbs where there is intent to evade tax or to assist another to evade: omitting a sum from a return; making a false statement or entry; making a false statement in connection with a deduction or allowance; signing a return without reasonable grounds for believing it to be true; giving a false answer to a question or request for information; preparing, maintaining or authorising false books of account or records, or falsifying them; and using any fraud, art or contrivance.

Section 82(1A) distinguishes two modes of trial:

•          on summary conviction — a fine at level 3 (HK$10,000), a further fine of treble the undercharged amount and 6 months’ imprisonment;

•          on indictment — a fine at level 5 (HK$50,000), a further fine of treble the undercharged amount and 3 years’ imprisonment.

⚠️ The formulation “a fine at level 3 and 3 years’ imprisonment” mixes the two modes. The maximum IRD quotes in its own material — “a fine of $50,000, a further fine of treble the amount of the tax undercharged and 3-year imprisonment” — is the maximum on indictment.

Section 82 contains no limitation period. The six-year limit in section 80(3) is expressly confined to “this section”, meaning section 80.

Section 82(2) also gives the Commissioner a compounding power.

Section 82A: additional tax

Section 82A(1) repeats the list of defaults in section 80(2) and provides that such a person “shall, if no prosecution under section 80(2) or 82(1) has been instituted in respect of the same facts, be liable to be assessed under this section to additional tax of an amount not exceeding treble the undercharged amount”.

Note the placement: the no-double-jeopardy bar sits inside section 82A(1), not in subsection (2). The converse bar is in section 82A(7): “A person who has been assessed to additional tax under this section is not liable to be charged on the same facts with an offence under section 80 or 82.”

Section 82A(2) says something different: “Additional tax shall be payable in addition to any amount of tax payable under an assessment, or an additional assessment under section 60.”

The procedure for assessing additional tax

Section 82A(3): “An assessment of additional tax may be made only by the Commissioner personally or a deputy commissioner personally.”

Section 82A(4) imposes a mandatory pre-assessment procedure. Before assessing, the specified authority must:

•          (a)(i) notify the person of the proposal, identifying the alleged incorrect return, incorrect statement or incorrect information, or the alleged failure to comply with the section 51(1) notice or with section 51(2);

•          (a)(ii) include a statement of the person’s right to submit written representations;

•          (a)(iii) specify a date “which must not be earlier than 21 days from the date of service of the notice” by which representations and evidence must be received;

•          (b) “consider and take into account any representations and evidence” received under paragraph (a).

The exception is section 82A(4A): if the specified authority is of the opinion that the person is about to leave Hong Kong, the assessment may be made without giving the notice.

Section 82A(6) permits an assessment on a deceased person’s executor, recoverable as a debt out of the estate.

Neither section 82 nor section 82A contains a limitation period.

Service provider liability: sections 80K to 80N

The service provider offences sit in their own sections, inserted by Ordinance No. 18 of 2021.

Section 80K creates three offences, each requiring absence of reasonable excuse:

•          80K(2): the service provider fails to furnish the return for or on behalf of the taxpayer;

•          80K(3): the service provider fails to comply with section 51AAD(3) or (4) — failing to obtain the taxpayer’s confirmation or to retain it for seven years;

•          80K(4): the service provider furnishes the return not in accordance with the information provided, or instructions given, by the taxpayer, and the return so furnished is incorrect in a material particular (whether or not because information was omitted).

The sanction under section 80K(5) is a fine at level 3 (HK$10,000).

Section 80L: the court may order the service provider to do the act in cases under 80K(2) or (3); failure to comply with that order carries a fine at level 6 (HK$100,000).

Section 80M — a bespoke limitation period: “Despite section 26 of the Magistrates Ordinance (Cap. 227), proceedings for an offence under section 80K(2), (3) or (4) may be brought within 6 years after the expiry of the year of assessment during which the offence was committed.”

Section 80N empowers the Commissioner to compound a section 80K offence and to stay or compound proceedings before judgment.

The parallel Part 4AA offences: sections 80O and 80P

Anyone mandated to file a profits tax return electronically is by definition a Part 4AA entity — and therefore exposed to a separate set of offences. They are easy to miss because they sit outside the return-related block of Cap. 112.

Section 80O, “Minimum tax for MNE groups: offences by Part 4AA entities”, creates an offence where a Part 4AA entity, without reasonable excuse: (a) fails to comply with a requirement under section 3(1) of Schedule 63, a requirement under section 5(1) of Schedule 63, or a requirement of a notice given under section 12(1) of Schedule 63; (b) in purported compliance with section 3(1) of Schedule 63, files a top-up tax return that is misleading, false or inaccurate in a material particular; (c) does the same in relation to a notice under section 5(1) of Schedule 63; or (d) makes a statement or provides information relating to a matter affecting its liability.

The sanctions: under subsections (1)(a)(i) and (ii), (b), (c) and (d) — a fine at level 3 plus a further fine of treble the top-up tax undercharged amount; under subsection (1)(a)(iii) — a fine at level 3. The court may order the entity to do the act it failed to do, and non-compliance with that order is a distinct offence.

Section 80O(2) repeats the now-familiar formula: “For subsection (1)(a)(i) and (ii), (b), (c) and (d), engaging a service provider under section 13 of Schedule 63 does not in itself constitute a reasonable excuse.”

Section 80P, “Minimum tax for MNE groups: offences by service provider”, imposes parallel liability on a service provider engaged to file a top-up tax return or notification.

⚠️ The practical point. For a phase 1 applicable entity the profits tax return is not the only filing obligation, and generally not the larger one. The same entity files a top-up tax notification and a top-up tax return under the Schedule 63 regime, each with its own deadlines and its own offences. Compliance planning built around BIR51 alone is incomplete in such a structure. The perimeter is worked through in our analysis of the global minimum tax and HKMTT.

The general limitation period in the Magistrates Ordinance

Section 26 of the Magistrates Ordinance (Cap. 227): “In any case of an offence, other than an indictable offence, where no time is limited by any enactment for making any complaint or laying any information in respect of such offence, such complaint shall be made or such information laid within 6 months from the time when the matter of such complaint or information respectively arose.”

That explains the whole architecture of time limits in Cap. 112:

•          section 80(3) expressly imposes a six-year period and thereby displaces the general rule;

•          section 80M has to say “despite section 26 of the Magistrates Ordinance”, because the section 80K offences are tried summarily and would otherwise fall under the six-month rule;

•          section 82 contains no period of its own, but the Cap. 227 rule does not reach it, because a section 82 offence is triable on indictment — and section 26 excludes indictable offences from its scope.

IRD’s penalty policy: the published scales

IRD publishes its own penalty policy, and that is what should be relied on rather than industry generalisations.

Part E: profits tax cases without a field audit

This part applies to profits tax cases that do not involve a field audit or investigation. IRD’s wording: “For failure to notify chargeability to tax or failure to submit tax return in time, the Department will make reference to the following penalty loading scale.”

Default	Group (i) — ordinary	Group (ii) — where the return is filed after two or more estimated assessments
First offence	10% of the tax undercharged	20% of the tax undercharged
Second offence within 5 years	20%	30%
Third or subsequent within 5 years	35%	50%

How “offences” are counted in the five-year window. IRD defines it directly: “For the purpose of counting the number of offences within 5 years, ‘offence’ means one in respect of which a warning letter, a compound, a court fine or a section 82A penalty assessment has been issued.”

Note that a warning letter already counts as an offence for escalation purposes. A company that has been warned twice lands straight in the top row on its third default.

IRD qualifies the scale: “The above percentages are for general guidance only. They may be adjusted upwards or downwards depending on the circumstances of each case. The general relevant factors to be considered include the length of delay, the amount of tax involved, the reasons given for committing the offence, the attitude of and the remedial steps taken by the taxpayer.”

For omission or understatement of profits the Part D scale applies, though “the fact that no field audit or investigation has been conducted will be considered as a mitigating factor”.

Part D: field audit and investigation cases

The scale is expressed as a percentage of the tax undercharged, graded by seriousness and by how voluntarily the disclosure was made.

Nature of omission / unde­rsta­tement	Full voluntary disclosure (normal / max)	Disclosure with full information promptly on challenge (normal / max)	Incomplete or belated disclosure (normal / max)	Disclosure denied (normal / max)
Group (a)	15 / 60	75 / 100	140 / 180	210 / 260
Group (b)	10 / 45	50 / 75	110 / 150	150 / 200
Group (c)	5 / 30	35 / 60	60 / 100	100 / 150

IRD’s definitions of the groups:

•          Group (a) — “cases where the taxpayers show intentional disregard to the law and adopt deliberate cover-up tactics involving the preparation of a false set of books, padded wage rolls and fictitious entries or multiple omissions over a long period of time”;

•          Group (b) — “cases with slightly less serious acts of omission resulting from recklessness including the ‘hand in the till’ type of evasion, failure to bring to account sales of scrap, and sheer gross negligence”;

•          Group (c) — “cases where the taxpayers fail to exercise reasonable care and omit profits/income such as lease premium, one-off commission, etc.”

The maxima include commercial restitution (CR). IRD: “For cases completed after 30 November 2003, the CR (commercial restitution) is at 7% per annum monthly compounded for periods up to and including 30 November 2003 and at the best lending rate monthly compounded for periods after 30 November 2003.”

⚠️ The fixed sums “HK$1,200 for a first offence and HK$3,000 for a second” do not appear in IRD’s published policy. A full-text search of the Penalty Policy page returns no occurrence of either figure. The only quantified late-filing policy IRD publishes for profits tax returns is the Part E percentage scale. Those sums circulate in advisory commentary and should not be presented as IRD’s current published policy.

The sums IRD does publish for individual offences

On the same policy page IRD states the figures directly:

Offence	IRD’s wording
s.80(1) — employer offences	“The offence is subject to a fine of $10,000”
s.80(1A) — record keeping	“a fine of $100,000”
s.82(1) — evasion	“a fine of $50,000, a further fine of treble the amount of the tax undercharged and 3-year imprisonment”
s.80K — service provider	“a fine of $10,000 if the service provider has no reasonable excuse… The offence may be compounded in lieu of prosecution under section 80N”
s.82A	“The maximum amount of additional tax is treble the amount of the tax undercharged”

Estimated assessment and the special objection condition

Failing to file does not block the tax — it merely hands the computation to the assessor.

Section 59(3) of Cap. 112: “Where a person has not furnished a return and the assessor is of the opinion that such person is chargeable with tax, he may estimate the sum in respect of which such person is chargeable to tax and make an assessment accordingly, but such assessment shall not affect the liability of such person to a penalty by reason of his failure or neglect to deliver a return.”

Section 59(4) adds that where the accounts of a trade or business have not been kept in a satisfactory form, the assessor may assess the profits “on the basis of the usual rate of net profit on the turnover of such trade”.

The special condition on objecting

Section 64(1) states the general rule: no notice of objection is valid unless it states precisely the grounds of objection and is received by the Commissioner within 1 month after the date of the notice of assessment.

Proviso (b) to section 64(1) adds a condition specific to estimated assessments: “where any assessment objected to has been made under section 59(3) in the absence of any return required under section 51, no notice of objection against such assessment shall be valid unless, in addition to such notice being valid in accordance with the foregoing provisions of this subsection, the return required as aforesaid has been made within the period provided by this subsection for objecting to the assessment or within such further period as the Commissioner may approve for the making of such return.”

The practical consequence: an estimated assessment cannot be challenged without filing the outstanding return. An objection without the return is invalid, not merely weak on the merits.

Proviso (a) to section 64(1) allows the Commissioner to extend the one-month period where he is satisfied that the person was prevented from giving notice “owing to absence from Hong Kong, sickness or other reasonable cause”.

The objection procedure, the Board of Review hearing and holdover of the tax in dispute are worked through in our separate guide to disputing an IRD assessment.

Record keeping: section 51C and the seven years

Section 51C(1) of Cap. 112: “Subject to subsection (2), every person carrying on a trade, profession or business in Hong Kong shall keep sufficient records in the English or Chinese language of his income and expenditure to enable the assessable profits of such trade, profession or business to be readily ascertained and shall retain such records for a period of not less than 7 years after the completion of the transactions, acts or operations to which they relate.”

⚠️ The clock runs neither from the year end nor from the filing date but “after the completion of the transactions, acts or operations to which they relate”. IRD’s BIR51 notes render this as “at least 7 years after the date of the transactions to which they relate, or until the corporation is dissolved, if this is sooner”.

Section 51C(2) provides two exceptions: records the Commissioner has specified need not be preserved, and records of a dissolved corporation.

Section 51C(3) defines “records” as including (a) books of account “whether kept in a legible form, or in a non-legible form by means of a computer or otherwise” recording receipts and payments or income and expenditure; and (b)vouchers, bank statements, invoices, receipts and other documents.

Section 51C(4) sets out the minimum content:

Category	Requirement
Assets and liabilities	Records of assets and liabilities
Cash movements	Records of day-to-day receipts and payments
Goods businesses	Records of all goods purchased and sold, with sellers and buyers, “in sufficient detail to enable the Commissioner to readily verify the quantities and values”, all related invoices, year-end trading stock statements and stocktaking records
Services businesses	Records of services provided

Section 51D imposes a parallel seven-year duty on owners of land and buildings in respect of records of consideration for the right of use. Do not confuse it with section 51C: 51C is business, 51D is property.

Liability — section 80(1A): a fine at level 6, HK$100,000. Section 80(2C): failure to comply with a court order made under section 80(1A) is a distinct offence, also at level 6.

Parallel classification and data-retention duties arise under automatic exchange of information — these are covered in our guide to CRS and automatic exchange of information in 2026.

A step-by-step algorithm: from receiving the return to filing it

Step 1. Establish whether you have received a return, and which one. Check the form (BIR51, BIR52 or BIR54), the date of issue and the Return Identification Number (RIN) on the paper copy. The RIN is required to file through the portal without a BTP account.

Step 2. If no return has arrived, test section 51(2). If the basis period produced assessable profits before the set-off of any loss brought forward, notify IRD on form IR6168 not later than four months after the end of the basis period. Do not wait for a return — the first return arrives roughly eighteen months after incorporation.

Step 3. Determine the filing mode. Answer Item 3.9 of BIR51 (Item 2.8 of BIR52): are you a phase 1 applicable entity— a Part 4AA entity of a group within the global minimum tax? If so, test the six exceptions under section 51AAC(3). If none applies, filing is electronic only; the semi-electronic mode is not accepted.

Step 4. Determine the deadline. If you have a tax representative, identify your accounting date code (N, D or M) and the corresponding date from the block extension letter. Remember that for code D the dates are 31 August 2026 (paper) and 2 October 2026 (electronic) under the supplementary letter of 14 July 2026, not 17 August. If you have no representative, the default period runs from the date of issue, adjusted under section 71 of Cap. 1.

Step 5. Register access if filing electronically. The chain is: ITP account → BTP User Account → appointment as administrator → BTP Business Account. Authentication is iAM Smart, the ITP TIN and password, or a personal digital certificate. Allow time for identity verification and the Companies Registry check.

Step 6. Assemble the supporting documents. Financial statements and a tax computation are required wherever there was any gross income — the former HK$2,000,000 threshold no longer applies. Audited statements are dispensed with only for dormant companies, companies from jurisdictions with no statutory audit, and Hong Kong branches of foreign companies supplying the four specified items.

Step 7. Prepare the iXBRL files if filing electronically or semi-electronically. Use the current IRD Taxonomy Package edition and the current tool version. Meet the minimum tagging requirement and the List of Mandatory Items — mandatory items are tagged even where absent from the statements, with “0” entered. The limits are 20MB and no JavaScript. Allow one working day for validation.

Step 8. Identify and file supplementary forms S1–S22. They are always filed electronically, even where the return is on paper. If the return is on paper, print, sign and attach the IR1477 Control List, signed by the same person who signs the return.

Step 9. Check the critical fields. Item 1.1 — Assessable Profits, not Net Assessable Profits. Item 4.3 — the six-digit HSIC code (or “000000”). Item 7.1.2 — the auditor’s practising certificate number. Parts 10 to 12 — in Hong Kong dollars, every item completed, “0” where nil. Item 12.1 — gross income in the wide sense, not turnover.

Step 10. Sign. On paper, wet ink by a person within sections 56, 56AA or 57, with the inapplicable capacities deleted at Part 13. Electronically, through the ITP, a personal digital certificate or iAM Smart with digital signing. A service provider may use an organisational certificate but must first obtain form IR1476 from the client and retain it for seven years.

Step 11. Preserve the evidence of filing and the source data. Records are kept for not less than seven years under section 51C, including the data underlying the iXBRL files.

Step 12. Track the assessment and the provisional charge. Check the notice of assessment, the split between the two instalments and, if one of the six grounds in section 63J(2) applies, lodge a holdover application — not later than 28 days before the payment date or 14 days after the notice, whichever is the later.

Common mistakes and what each one costs

Mistake 1. Assuming the return is due once a year on a fixed date. Hong Kong sets no calendar filing date for profits tax. The obligation arises from a notice, and the period is printed on the form. Cost: a company waiting for “31 March” or “30 June” misses 4 May or 31 August and falls within section 80(2) — a fine at level 3 (HK$10,000) plus a further fine of treble the undercharged amount, and on a repeat within the five-year window, the Part E scale with a loading of 20% to 35% of the tax.

Mistake 2. Believing mandatory e-filing applies to everyone. Phase one covers only a phase 1 applicable entity — an entity of a group within the global minimum tax. The reverse error is no cheaper: a mandated entity that files on paper outside the six exceptions risks the Commissioner treating the return under section 51AAC(1) as not having been furnished. Cost: liability not for the format but for failing to furnish a return under section 80(2)(d), by which time the deadline has passed, plus a possible estimated assessment under section 59(3).

Mistake 3. Using 17 August 2026 for code “D”. It was replaced by IRD’s supplementary letter of 14 July 2026 with 31 August (paper) and 2 October (electronic). Cost: here the error is paradoxically on the safe side — but the converse, treating 2 October as the paper deadline, produces a month’s default.

Mistake 4. Assuming small businesses are relieved from supporting documents. The HK$2,000,000 gross income threshold has been withdrawn: wherever there was any gross income, financial statements and a tax computation are required. Cost: a return without supporting documents is treated as incomplete; the likely sequence is an IRD query, delayed processing and, absent a response, an estimated assessment under section 59(3) — after which no objection is valid without the full package (proviso (b) to section 64(1)).

Mistake 5. Not notifying chargeability in the first year. The first return arrives about eighteen months out, while the section 51(2) period is four months after the end of the basis period, tested before the set-off of any loss brought forward. Cost: the offence in section 80(2)(e) — a level 3 fine plus treble tax — or additional tax under section 82A of up to treble the tax undercharged.

Mistake 6. Entering Net Assessable Profits at Item 1.1 instead of Assessable Profits. This is the first item on IRD’s own list. Cost: a distorted base, potential characterisation as an incorrect return under section 80(2)(a) or a ground for additional tax under section 82A(1)(a) — on the Part D group (c) scale that is 5% to 30% on voluntary disclosure, and up to 100% to 150% where disclosure is denied.

Mistake 7. Signing a paper return with a digital signature, name chop or signature chop. IRD prohibits it expressly: the paper return, audited statements and IR1477 are not accepted bearing a digital signature or chop alone. Cost: the return comes back as improperly signed while the clock continues to run.

Mistake 8. Leaving more than one capacity undeleted at Part 13. An express prohibition on IRD’s list. Cost: the signatory cannot be identified, the return is returned, and in the worst case there is an argument about whether section 57(1) was satisfied at all.

Mistake 9. Claiming block extension without a TRP account. From April 2026 applications and notifications under the scheme are submitted only electronically through the Tax Representative Portal. Cost: the representative’s clients revert automatically to the default one month — so for code “M” the deadline becomes 4 May 2026 instead of 16 November 2026, and the default is more than six months old by the time it is discovered.

Mistake 10. Ignoring Item 10.20 on the unilateral foreign tax credit. IRD wrote no note for it, but the box is compulsory and “0” must be entered where it does not apply. Moreover, under section 63H(1E) a section 50 credit for the preceding year is taken into account in computing provisional tax. Cost: the error replicates into the following year through the provisional charge, and correcting it requires not an amended return (Hong Kong has none) but a signed letter to the Commissioner.

Mistake 11. Assuming that engaging an adviser transfers the liability. Section 80(2AA) and section 82A(1AA) provide expressly that engaging a service provider does not in itself constitute a reasonable excuse, and section 51AAD(5) that the taxpayer is not relieved from the section 51(1) obligation. Cost: both are exposed — the taxpayer under sections 80 and 82A, and the service provider additionally under section 80K with a level 3 fine.

Mistake 12. Missing the holdover application deadline for provisional tax. Section 63J(1) sets it at not later than 28 days before the payment date or 14 days after the notice, whichever is the later. Extension is available only on ground (ab). Cost: provisional tax for the following year is paid by reference to the preceding year’s profits even where actual profits have fallen by more than 10%; recovery then depends on the section 63K cascade after the real assessment, roughly a year later.

Who each route suits, and when professional review is required

Who can reasonably file on paper without help

•          Companies outside phase one of mandatory e-filing — that is, outside groups within the global minimum tax.

•          Structures reporting under standards other than HKFRS or the SME-FRF & SME-FRS, which qualify for the PDF carve-out for financial statements (though not for the tax computation).

•          Companies catching up on filings for 2021/22 and earlier: electronic filing is unavailable for those years entirely.

•          Dormant companies with no gross income in the basis period — provided the return is still filed.

Who should use the electronic or semi-electronic mode

•          Phase 1 applicable entities, for whom the electronic mode is the only permissible one outside the six exceptions.

•          Any company that needs the extra month, which is granted on application made at least seven working days before the due date.

•          Companies reporting under HKFRS that already have an iXBRL preparation process — reusing a taxonomy is far cheaper than a one-off build.

•          Small companies with gross income of not more than HK$5,000,000, which can use the simplified Template Tool with pre-assigned tags.

Who this route does not suit

•          Sole proprietors: they report at Part 5 of BIR60, not on BIR52, and live by the BIR60 timetable.

•          Tax representatives not appointed as service providers: they get only the Uploading, Completion and semi-electronic modes and cannot electronically sign and submit.

•          Companies with no time to register access: the chain ITP → BTP User Account → appointment → BTP Business Account, with Companies Registry verification, does not complete in a few days.

When professional review is essential

First. Where your group is approaching the GloBE consolidated revenue threshold. Phase 1 applicable entity status arises on a “2 of the preceding 4 fiscal years” test, and once it arises the irreversible “once in, always in” rule in section 3 of Part 2 of Schedule 65 applies.

Second. Where the company has connected entities and the two-tiered rates are in play. The election under section 14AAC(4) is irrevocable, exactly one entity in the group may use the reduced rates, and a wrong choice is fixed permanently.

Third. Where payments to non-residents arise. The line between sections 20A(2) and 20B(3), the quarterly 1% obligation under section 20A(3), and the question of whether a BIR54 is due at all, all turn on an analysis of the actual source of the income.

Fourth. Where IRD has issued an estimated assessment under section 59(3). An objection without the required return is invalid under proviso (b) to section 64(1), and the one-month period is extended only on the grounds in proviso (a).

Fifth. Where a notice of intention to assess additional tax under section 82A(4) has been received. You have not less than 21 days to make written representations, and the Commissioner must consider them; the quality of those representations directly determines where you land on the Part D or Part E scale.

Sixth. Where a holdover of provisional tax is contemplated. The grounds in section 63J(2) are exhaustive, the deadlines are hard, and an extension is available on only one of the six.

Frequently Asked Questions

When is the Hong Kong profits tax return for 2025/26 due?

The 2025/26 returns were issued on 1 and 2 April 2026. The default period is one month from the date of issue for BIR51 and BIR52 and two months for BIR54. Companies with an appointed tax representative get extended dates by accounting date code: code “N” — 4 May 2026, code “D” — 31 August 2026, code “M” — 16 November 2026, and for “M” code loss cases — 1 February 2027.

What is the difference between BIR51, BIR52 and BIR54?

BIR51 is filed by corporations, BIR52 by persons other than corporations — principally partnerships — and BIR54 is completed by a Hong Kong agent or payer in respect of a non-resident person. A sole proprietor does not file BIR52: the business is reported at Part 5 of the individual return, BIR60.

Must my Hong Kong company file electronically in 2026?

Only if it is a phase 1 applicable entity — a Part 4AA entity of a multinational enterprise group within the global minimum tax, as defined in Schedule 65 to Cap. 112. For everyone else electronic filing remains voluntary and buys an extra month on application.

What happens if the return is filed late?

Section 80(2) of the Inland Revenue Ordinance applies: a fine at level 3, being HK$10,000, plus a further fine of treble the undercharged amount. Alternatively IRD may assess additional tax under section 82A of up to treble the tax undercharged. IRD’s published policy for cases without a field audit sets a loading of 10% of the tax on a first offence, rising to 50% on a third within five years.

Must audited financial statements accompany a profits tax return?

Yes, in all cases except three: dormant companies within the terms of the Companies Ordinance (Cap. 622); companies incorporated in jurisdictions whose laws do not require an audit and where an auditor’s report has not been prepared; and Hong Kong branches of foreign companies that supply the four items IRD specifies. The former relief for small businesses with gross income up to HK$2,000,000 from filing supporting documents no longer applies.

What should I do if no return has arrived but the company has profits?

File a notification of chargeability on form IR6168 not later than four months after the end of the basis period. Profits are tested before the set-off of any loss brought forward. Waiting for the return is not an option: the first return is issued roughly 18 months after incorporation, by which time the section 51(2) deadline will have expired.

How long must a Hong Kong company keep its records?

Not less than seven years under section 51C of Cap. 112, counted from the completion of the transactions to which the records relate rather than from the filing date. Breach carries a fine at level 6, up to HK$100,000. The exception is the records of a dissolved corporation.

Can an amended profits tax return be filed?

No. IRD expressly instructs that a paper profits tax return must not be used for this purpose. A correction is made by a duly signed written notice to the Commissioner setting out the name, the signatory’s capacity, the company name, the file number, the year of assessment and the details of the amendment or supplement.

What is block extension and who can use it?

It is an extension scheme for taxpayers who have appointed a tax representative. The extension depends on the accounting date code — N, D or M. From April 2026 applications and notifications under the scheme are made only electronically through the Tax Representative Portal; a representative without a TRP account cannot use the scheme at all.

Is iXBRL required for a small company?

Yes, where the return is filed electronically or semi-electronically: there is no size-based exemption. Companies with gross income of not more than HK$5,000,000 may use the simplified Template Tool with pre-assigned tags. The exception turns on accounting standards: a company not applying HKFRS, HKFRS for Private Entities or the SME-FRF & SME-FRS may submit financial statements in PDF, but the tax computation must still be in iXBRL.

How is provisional profits tax held over?

By written application to the Commissioner on one of the six grounds in section 63J(2): profits falling below 90% of the prior year’s, self-employed MPF contributions, a misstated loss brought forward, cessation of business, an election for personal assessment, or an objection lodged against the prior year’s assessment. The application must be lodged not later than 28 days before the payment date or 14 days after the notice, whichever is the later.

Is there a profits tax reduction in Hong Kong in 2026?

Yes. For the year of assessment 2025/26 there is a one-off 100% reduction of profits tax capped at HK$3,000 per case, under section 100 and Schedule 43 of Cap. 112 as amended by Ordinance No. 2 of 2026, passed on 13 May 2026 and gazetted on 22 May 2026. Profits tax rates themselves are unchanged.

Key takeaways

A profits tax return is required individually, not filed to a calendar. Section 51(1) of Cap. 112 fixes no date — only “a reasonable time stated in such notice”. The one month for BIR51 and BIR52 and the two months for BIR54 are printed on the forms themselves.

The 2025/26 bulk issue took place on 1 and 2 April 2026 — about 270,000 returns.

Extended dates under the Block Extension Scheme for 2025/26: code “N” — 4 May 2026, code “D” — 31 August 2026, code “M” — 16 November 2026, “M” code loss cases — 1 February 2027. The code “D” date was changed by IRD’s supplementary letter of 14 July 2026; the previously published 17 August no longer applies.

Mandatory electronic filing covers only phase 1 applicable entities — Part 4AA entities of groups within the global minimum tax, under the single row of Schedule 65 to Cap. 112. BIR54 is not in that Schedule.

The “once in, always in” rule is statutory, not administrative: section 3 of Part 2 of Schedule 65. A company that acquires the status keeps it for every subsequent year of assessment.

Later phases will be introduced by Gazette notice, not by fresh legislation: section 51AAB(4) empowers the Commissioner to amend Schedule 65.

The HK$2,000,000 gross income threshold for relief from supporting documents has been withdrawn. Wherever there is any gross income, financial statements and a tax computation are required.

All supplementary forms S1–S22 are filed electronically in every case — irrespective of the return’s filing mode, for the years of assessment 2020/21 to 2026/27 inclusive.

Only returns for the years of assessment 2022/23 to 2025/26 can be filed electronically. Earlier years are paper only.

The duty to notify chargeability bites four months after the end of the basis period, while the first return arrives roughly eighteen months out. Form IR6168 closes the gap.

For 2025/26 there is a one-off 100% reduction of profits tax capped at HK$3,000 per case; the 8.25% / 16.5% and 7.5% / 15% rates are unchanged.

Records are kept for not less than 7 years under section 51C, counted from completion of the transactions; breach carries a fine of up to HK$100,000.

Summary

The Hong Kong profits tax return in 2026 is filed on one of three forms: BIR51 for corporations, BIR52 for persons other than corporations, and BIR54 in respect of non-resident persons. The obligation to file arises from an individual notice issued by the Inland Revenue Department under section 51(1) of the Inland Revenue Ordinance (Cap. 112); the statute fixes no calendar filing date. Returns for the year of assessment 2025/26 were bulk-issued on 1 and 2 April 2026, and the default period is one month from the date of issue for BIR51 and BIR52 and two months for BIR54. Taxpayers with an appointed tax representative use the Block Extension Scheme: accounting date code “N” — 4 May 2026, code “D” — 31 August 2026 under IRD’s supplementary letter of 14 July 2026, code “M” — 16 November 2026, and “M” code loss cases — 1 February 2027. The first phase of mandatory electronic filing came into operation on 1 April 2026 under section 51AAB of and Schedule 65 to Cap. 112 as enacted by Ordinance No. 21 of 2025: it applies exclusively to a phase 1 applicable entity, meaning a Part 4AA entity of a multinational enterprise group within the global minimum tax, and does not extend to BIR54. Six grounds for paper filing are specified by the Commissioner under section 51AAC(3). All supplementary forms S1 to S22 are filed electronically irrespective of the return’s filing mode. Under the electronic and semi-electronic modes the financial statements and tax computation are submitted in iXBRL under the 2025 edition of the IRD Taxonomy Package. The former relief for small businesses with gross income up to HK$2,000,000 from submitting supporting documents has been withdrawn. Late filing attracts section 80(2) — a HK$10,000 fine plus treble the tax undercharged — or additional tax under section 82A of up to treble that amount. For 2025/26 a one-off 100% reduction of profits tax capped at HK$3,000 per case applies under Schedule 43 to Cap. 112 as amended by Ordinance No. 2 of 2026.

If you are planning to incorporate or restructure a Hong Kong company and want the tax reporting set up correctly from the first year, choose the right jurisdiction and structure with UPPERSETUP, and for ongoing bookkeeping and tax support see UPPERSETUP accounting services. Jurisdiction-level information is collected on our Hong Kong page.

Sources

Hong Kong legislation

1.        Inland Revenue Ordinance (Cap. 112) — consolidated text as at 22 May 2026. Sections 14AA, 14AAB, 14AAC, 20A, 20B, 50, 51, 51AA, 51AAB, 51AAC, 51AAD, 51C, 51D, 56, 56AA, 57, 59, 63G–63K, 63HA, 64, 80, 80K–80N, 82, 82A, 100; Schedules 8, 8A, 8B, 43, 63, 65.

2.        Interpretation and General Clauses Ordinance (Cap. 1) — section 71, “Computation of time”.

3.        General Holidays Ordinance (Cap. 149) — the Schedule of general holidays.

4.        Criminal Procedure Ordinance (Cap. 221) — Schedule 8, “Level of Fines for Offences”.

5.        Magistrates Ordinance (Cap. 227) — section 26, “Limit of time for complaint or information”.

6.        Companies Ordinance (Cap. 622) — the dormant company concept.

7.        Limited Partnership Fund Ordinance (Cap. 637) — section 2, definition of authorized representative.

8.        Inland Revenue (Amendment) (Miscellaneous Provisions) Ordinance 2021 — Ordinance No. 18 of 2021, in force 11 June 2021.

9.        Inland Revenue (Amendment) (Minimum Tax for Multinational Enterprise Groups) Ordinance 2025 — Ordinance No. 21 of 2025, in force 6 June 2025.

10.    Inland Revenue (Amendment) (Tax Concessions, Concessionary Deductions and Allowances) Ordinance 2026 — Ordinance No. 2 of 2026, passed 13 May 2026, gazetted 22 May 2026.

11.    Inland Revenue (Amendment) (Automatic Exchange of Information) Ordinance 2026 — Ordinance No. 4 of 2026, gazetted 26 June 2026, coming into operation 1 January 2027.

Inland Revenue Department (IRD)

12.    Completion of profits tax returns and supplementary forms — filing modes, supporting documents, audit exceptions, IRC1952 and IRC1953.

13.    Specimen of the 2025/26 paper profits tax returns.

14.    Notes and Instructions for Form BIR51 — sections A–G, Parts 1–13, supplementary forms S1–S22.

15.    Major changes in the 2025/26 returns — Items 3.9, 3.9.1, 2.8, 2.8.1 and 10.20.

16.    Filing tips for the 2025/26 return — the dos and don’ts.

17.    Electronic filing of profits tax returns — modes, signatories, IR1476, years of assessment.

18.    BEPS 2.0 and mandatory electronic filing — the phase 1 applicable entity and the six exceptions.

19.    Illustrative examples on mandatory e-filing.

20.    iXBRL: background and requirements — minimum tagging, the 20MB limit, tool versions.

21.    iXBRL: materials for download — taxonomy editions and tool versions.

22.    Consultation on e-filing of profits tax returns — the second consultation paper, November 2021.

23.    The new tax portals under eTAX — ITP, BTP and TRP.

24.    Business Tax Portal: registration and roles.

25.    Block Extension Scheme — the circular letter of 19 March 2026 and compulsory electronic applications.

26.    Electronic Block Extension Scheme — the transitional route and the 1 June 2026 deadline.

27.    Circular letter on block extension for 2025/26 (PDF) — paragraphs 7 and 16–21 and Appendix II.

28.    Supplementary circular letter extending the “D” code due date (PDF) — dated 14 July 2026.

29.    Tax Representatives’ Corner.

30.    Notification of chargeability — section 51(2) and forms IR6167, IR6168 and IR6129.

31.    IRD public forms — IR6167, IR6168, IR6129, IR1476. Form IR1477 is not on that page: it is described on the return-completion and supporting-document format pages.

32.    IRD penalty policy — Parts B, D and E.

33.    Profits tax return filing requirements: a reminder — withdrawal of the HK$2,000,000 threshold.

34.    Demand notes and provisional tax.

35.    Format specifications for supporting documents and the Control List.

36.    Table of enactments amending Cap. 112.

37.    IRD press release on the launch of the new tax portals, 22 July 2025.

38.    IRD press release on the bulk issue of returns, 3 April 2023 — withdrawal of the HK$2,000,000 threshold from the year of assessment 2022/23.

GovHK and government press releases

39.    Profits tax: filing of returns — the eighteen-month first-return practice.

40.    eTAX: the Business Tax Portal and Tax Representative Portal.

41.    BTP account registration.

42.    FAQ on electronic filing of profits tax returns.

43.    Holding over of provisional tax.

44.    Press release on the bulk issue of returns, 1 April 2026.

45.    Press release on the passage of the tax concessions bill, 13 May 2026.

A note on sources. Every statutory formulation in this guide is taken from the official consolidated texts on Hong Kong e-Legislation and from Inland Revenue Department and GovHK publications. No consultancy or corporate services publications were used as sources.

Two items could not be confirmed against an official source and are flagged as such in the text: the “75% / 25%” split of provisional tax between the two instalments, and the fixed late-filing penalties of “HK$1,200 / HK$3,000”. Both are given with an express statement that they lack official confirmation and should not be reproduced as current IRD policy.

The electronic filing dates for codes “N” (4 June 2026) and “M” (16 December 2026) are flagged as derived rather than stated: the block extension letter does not tabulate them, and they follow from the further-month rule.

Disclaimer

This material is provided for information purposes only and does not constitute legal, tax, financial, investment or consulting advice. Before making any decision, obtain individual professional advice addressing your specific circumstances, jurisdiction, corporate status and the regulators’ current requirements.

Publication date: August 2026.