If you are not sure about how much tax you would need to pay for your Hong Kong company, Startupr can assist you with a detailed break down and a comprehensive explanation. To begin with, Hong Kong is the right place for your business as one of the main reasons is the business-friendly tax climate.
And taxes are a must since they are important for every individual, business, and the government. Taxes affect many fields such as the competitiveness, job creation, and even the health of a country’s economy. And in turn, these things influence companies and the population, hence making it one of the main duties for the companies in Hong Kong.
Hiring Startupr to be any of the following (or all) would help you experience the best service for your company:
- bookkeeper
- controller
- business advisor
Who is a Bookkeeper?
A bookkeeper is a person who is given the task of recording the transactions like the payment of bills, the collection of accounts receivable, payroll, purchases, sales, etc. Each company, be it a small one or a big enterprise needs a bookkeeper since these recorded transactions are used to pay the taxes later on and even stay as the proof when demanding for benefits/grants from the tax.
Typical individual bookkeepers do not normally have a university degrees in accounting. So, it is better to employ a professional firm that has a good background in this field just like Startupr. Having an inexperienced person can only make you lose a lot more than you should have.
Who is a Collector?
There are various types of collectors in the world, the most important being the Tax collector. The Tax Collector is the middle person who is responsible to collect the taxes from businesses or an individual, and submit them to the Government on time.
If you are looking for someone or an agency to take care of submitting your taxes, Startupr can take up the responsibility. Startupr would not only assist the payments to the government, but we would also advise you on possible tax deductions and allowances for your company.
Who is a Business Advisor?
For you to run an HK business efficiently, a business advisor is required for better counseling and advice. Every businessman needs a person who can give them the best assistance. This may be for advice in the business operations of the company, financial advice or taxation advice when it comes to filings to the government.
Taxes in Hong Kong
Due to the tax-friendly environment, Hong Kong companies have relatively low taxes compared to other jurisdictions. One of the leading duties for companies in Hong Kong is paying the taxes, and there are different tax amounts placed on a
person or company in a Hong Kong.
Income Tax
Income tax is a tax that is paid to the government according to the amount that is earned by the company on a yearly basis. There are two types and they are:
- Corporate – This is the tax that is charged on the profits that are earned by the company and the Hong Kong government charges 16.5% for the corporate Tax. For the new tax regime for the 2019 PTR (01 April 2018 to 31 March 2019) onwards, only 8.25% corporate tax on the first HKD 2 million assessable profits, and 16.5% corporate tax on profits over this amount.
- Individual – Individual income tax in a country is applied to a person who earns some profit in that particular country. The individual income tax percentage in Hong Kong is 15%.
Withholding
The withholding tax is a tax that is subtracted at the origin, particularly the one that is levied by a few countries on dividends or interest paid to someone who is a citizen outside that country. There are three types of withholding taxes deducted and they are:
- Dividend – 0%
- Interest – 0%
- Royalties – 5%-16.5%
Time for filing
Every HK Business needs to pay taxes in Hong Kong by filing the Profits Tax return, known as the PTR with the Inland Revenue Department (IRD), which is one of the main duties for the companies in Hong Kong. One to two months before the 2nd anniversary of the date of incorporation of the business, the very first PTR is issued by the IRD Hong Kong tax Authorities for the company.
After the government has issued the PTR, you would receive a notification from Startupr advising you to provide the completed PTR to the Government within three months. Furthermore, the PTR has to cover the period over the first 18 months after the company’s incorporation date.
Keep the following in mind and follow as the time gets close:
- Find out the fiscal year-end date for your company.
- In case your company has begun the business, you would need to prepare the documents mentioned below:
– All invoices
– All bank statements
– All expense receipts
– General ledger & the management account (Balance sheet, trial balance, income statement, etc.) - Submit the PTR to IRD
The deadline for the submission of the annual PTR, along with the audited financial statements for your second PTR and after that is within six to seven months of the company’s fiscal year-end.
Note that the profits tax rate is 16.5% for corporations in Hong Kong. And if the company hasn’t had any business yet, the NIL PTR needs to be filed with the IRD along with providing the annual audited financial statements. Moreover, the director of the company or the secretary has to provide with a declaration that the company did not start yet.
Accounting & Bookkeeping Services
We also offer our professional booking and accounting services for companies, for people who are looking for more professional services and for outsourcing their company accounts. With our experience in accounting and tax matters in Hong Kong, we will work to keep your financials in proper order. We pride ourselves in providing accurate and efficient accounts services coupled with our accounting software. We offer timely responses for your tax matters, and let you focus on other areas for running your businesses.
Our Accounting and Bookkeeping Services Include
- Bookkeeping services
- Preparation of financial statements
- Generate monthly reports
- Create Management accounts (Profit and Loss, Balance Sheet, Trial Balance, General Ledger)
- Bank reconciliation
*Retainment of All Company Documents in our Backoffice Software database
Our bookkeeping services are not limited to these, but are the basic ones provided for the monthly accounts. We also provide further accounting services, based on your company requirements.
A breakdown of our bookkeeping fees are as below:
| Pricing Guides | Number of transactions | Monthly | |
| Per industry | Per month | Bookkeeping | |
| 1/2/3 | 20 or less | HKD $2000/$2500/$3000* | |
| 1/2/3 | 50 or less | HKD $2500/$3000/$3500* | |
| 1/2/3 | 100 or less | HKD $3000/$3500/$4000* | |
| 1/2/3 | 150 or less | HKD $3500/$3500/$4500* | |
| 1/2/3 | 200 or less | HKD $4000/$3500/$5000* | |
| Over 200 | By Quotation |
*Estimate number only, as fees may vary for each customer based on required amount of work.
Bookkeeping by industry
- Service Company
- Trading, Transportation, Shipping, Retail Company
- High Volume/Special Case Companies
Note: Prices may be re-adjusted later on if the work required is more than previously arranged. In case your company is not included in the industries above, please contact us directly for a more accurate quotation.
We also offer accounting and taxation services in addition to bookkeeping services for your company. These additional services are tailor made for your company, and would be quoted based on your requirements. We would spend ample time on each case, and make sure the best solution for your company matters.
Additional Accounting and Taxation Services
Our services for this include the following:
- Payroll Services
- Arrange online payments/cheque payments
- Personal Salary Tax Filings
- Management account consultation
- Implement tax strategies to enhance tax efficiency
- Consult on tax effects of international transactions
- Tax compliance services such as tax computation and tax form preparation
- Advise on offshore status and profits tax exemption to the IRD
- Compose response for IRD Tax Query Letter
- Other services
If you are using our monthly or yearly bookkeeping services, we offer some basic advice on your accounting and taxation matters based on your company’s accounts. If you require further in depth services, we can quote you based on the time required to satisfy your needs.
Conclusion
The accounting and taxation matters of your company may impact your business dealings, and also is time consuming for business owners. While it is suggested to handle the accounts on your own for basic setups to save costs, you may want to seek professional help when the company grows and financials get more complex.
Hiring Startupr as your bookkeeper and tax advisor would allow you to enjoy comprehensive services that include efficient maintenance of the company books, consultation in effective tax plans to lower taxes, satisfy international tax compliance responsibilities and moderate taxation risks, and many more. Feel free to contact us at Startupr for a free quotation or advice on your accounts!