Audit & Profits Tax Filing

For many business owners in Hong Kong, the word "audit" triggers anxiety. Images of investigators poring over every receipt, asking difficult questions, and finding hidden problems.

But here's the truth: a statutory audit doesn't have to be stressful. When you understand what's required and prepare properly, the audit becomes a routine process—one that actually adds value to your business.

For many business owners in Hong Kong, the word "audit" triggers anxiety. Images of investigators poring over every receipt, asking difficult questions, and finding hidden problems.

Does Your Hong Kong Company Need an Audit?

The General Rule

Under the Hong Kong Companies Ordinance (Cap. 622), every company incorporated in Hong Kong must have its financial statements audited annually by an independent auditor . This applies to:

All limited companies, regardless of size.
Even companies with no revenue.

*The Only Exception: Dormant Status

The only way to avoid a statutory audit is to formally declare your company as dormant with the Companies Registry . To qualify:

The company must have no significant accounting transactions during the financial year
A special resolution must be passed and filed (Form ND2A)

What is a Statutory Audit?

A statutory audit is an independent examination of your company's financial statements by a qualified professional . The auditor checks whether your financial statements:

Present a true and fair view of your company's financial position
Comply with Hong Kong Financial Reporting Standards (HKFRS)
Meet the requirements of the Hong Kong Companies Ordinance

The result is an auditor's report that accompanies your financial statements when filed with the Inland Revenue Department (IRD).

Audit Preparation Checklist

A smooth audit depends on organized record-keeping.

Use this as a general checklist to prepare:

Banking Records	• Monthly bank statements for the entire year • Bank reconciliation reports • Confirmation of bank balances
Sales/Revenue	• Sales invoices (numbered sequentially) • Service agreements/contracts • Credit notes issued • Receipts for payments received
Purchases/Expenses	• Supplier invoices • Expense receipts (meals, transport, office supplies) • Petty cash records and vouchers • Credit card statements with supporting receipts
Payroll Records	• Salary records and payslips • MPF contribution statements • Employee contracts • IR56 forms filed during the year
Corporate Documents	• Updated Business Registration Certificate • Director and shareholder meeting minutes • Annual Return (NAR1)

Hong Kong Profits Tax Deadlines

Missing your Profits Tax Return deadline can mean hefty penalties. Learn filing deadlines, extension options, and how to stay compliant.

Tax season in Hong Kong follows a predictable rhythm. Every year, the Inland Revenue Department (IRD) issues Profits Tax Returns to corporations on the first working day of April .

The filing deadline depends on your company's financial year-end. Miss the wrong deadline, and you could face significant penalties.

The Tax Year and Basis Period

First, a quick clarification:

Term	Definition
Year of Assessment	1 April to 31 March of the following year
Basis Period	The financial year ending in the year of assessment

For example, if your company's financial year ends on 31 December 2025, that's the basis period for the Year of Assessment 2025/26.

Standard Filing Deadlines

The IRD issues Profits Tax Returns with different "codes" based on your financial year-end. Your filing deadline depends on this code .

Code	Financial Year-End	Standard Deadline
N Code	1 April – 30 November	May of the following year
D Code	1 December – 31 December	15 August of the following year
M Code	1 January – 31 March	15 November of the same year

Example Scenarios

Company	Year-End	Code	Return Issued	Standard Deadline
Company A	31 March 2026	M	April 2026	15 November 2026

New Companies: First Tax Return

Newly incorporated companies receive special treatment.

Milestone	Timeline
Incorporation	Day 0
First Profits Tax Return issued	Approximately 18 months after incorporation.
Filing deadline	Within 3 months from the issue date of the tax return.

This gives new businesses time to establish their accounting records before facing their first tax filing.

Extended Deadlines for Tax Representatives

If your company is represented by a tax representative (like our CPA firm), you can usually get an extension.