The Guidelines for Dormant Case – Hong Kong Limited Company

The Guidelines for Dormant Case

As you confirmed that the company is being dormant since the date of incorporation, the following information must be double confirmed:

1.      To determine the financial year ended date.

2.      To confirm the company is being dormant during the whole financial year (e.g. Period from the date of incorporation to the first year ended date).

3.      To remind that Inland Revenue Department (“IRD”), the Hong Kong Tax Authority, would issue Profits Tax Return (“PTR”) to the company after 18 months since the date of incorporation of the company normally to their registered office.

4.      To remind that any issued PTR should be completed and submitted to IRD within the required period (normally is within one month since the date of issuance of the PTR), any late submission will be subject to penalty charged by IRD which the maximum amount is HK$10,000 each. For the dormant company, only a “Nil” PTR will be submitted to IRD. IRD exempt the company to submit the audited financial statements for the respective financial period.  However, the audited financial statements for the said period is still required to prepare and IRD may be request for submission in future.  Also, the details of the audited financial statements (including the name of auditors and the date of auditors’ report) are required to fill in the PTR.

5.      According to Hong Kong Company Ordinance, any limited company registered in Hong Kong should perform audit on the financial statement and present the audited financial statement in annual general meeting (“AGM”). No exemption will be granted for the company was dormant during that period.

6.      If the company commences or recommences to earn assessable profits (before the set-off of any loss brought forward), then the company must inform the Commissioner of “IRD” in writing within 4 months after the end of the accounting period for that year of assessment. Failure to do so may render the company liable to a fine of HK$10,000 and a further fine not exceeding 300% of the tax undercharged or would have been undercharged.