Hong Kong Tax Filing Essentials｜How to Complete a Tax Return and Common Questions for First Time Filers

Tax filing season has come round again. Many employees and new entrants to the workforce will soon receive their first “green bomb”. When completing a Tax Return for the first time, it is natural to feel unsure where to begin. Below is a consolidated guide to the end-to-end first-time filing process, key points for completing the form and common questions, to help you handle it with ease.

Common questions for first-time tax filing

First-time filing can involve a range of issues. However, once you understand the key timetable and your obligations, completing the form and making the necessary arrangements will become much clearer. The questions below are those most commonly raised by first-time filers, to help you work through the process and key points step by step, starting from receiving the Tax Return.

1.When will I receive my tax return?

In general, Hong Kong Individual Tax Return / Tax Return (BIR60) are issued each year in May. Most taxpayers receive the green Tax Return (or an e-filing notification) in early to mid-May. If you have registered for eTAX, you will receive a notification in your eTAX account and may not receive a paper copy at your correspondence address.

2. When do I need to submit the return?

As a general rule, a paper Individual Tax Return must be submitted within one month from the date of issue. If you file online via eTAX, you are normally granted an automatic extension of one month.

• For example, if the date of issue of the Tax Return is 2 May, the deadline for a paper return is usually around 2 June; for e-filing, it would be 2 July.

3. What are the consequences of late submission or non-submission?

• The Inland Revenue Department (IRD) has the power to impose a penalty of up to HK$10,000 on taxpayers who submit their Tax Returns late, and may even institute prosecution.
• If you fail to submit a Tax Return for a prolonged period, the IRD may issue an “estimated assessment”, which may not take into account allowances and deductions you could otherwise claim. You may then need to apply to the IRD for revision, resulting in additional time and administrative effort.

4. When do I officially become a taxpayer who needs to file?

• Once you start receiving a regular salary or have income chargeable to Salaries Tax in a year of assessment, you meet the conditions for filing.
• The IRD generally decides whether to issue a Hong Kong Individual Tax Return / Tax Return (BIR60) based on information submitted by your employer, such as IR56E (notification of commencement of employment) or IR56B (Employer’s Return of Remuneration and Pensions).

5. I have just graduated and only started my first full-time job in September. When will I need to file?

• Your first year of assessment will cover income from September to 31 March of the following year.
• If, after allowances, tax is payable on your income for that period, the IRD will usually issue your first Individual Tax Return in May of the following year.

6.If my income is below the tax threshold, do I still need to submit an Individual Tax Return?

• Even if you ultimately do not need to pay any tax, once you receive a Tax Return you must complete and submit it on time; otherwise, you may be regarded as having filed late or failed to file.
• If you have not received a Tax Return but your income is close to the tax threshold, you may proactively check with the IRD or apply for a Tax Return to be issued, to avoid the hassle of having to pay back tax later.

7. I have other part-time, freelance work or a side business. How should I report it?

Many people may have additional sources of income alongside their primary employment. Such income should also be declared when filing a Tax Return.

• Part-time work (employment): If you are paid a fixed salary or hourly wages as an employee, it is usually within the scope of Salaries Tax. You should report income from all employers under the Salaries Tax section.
• Freelancers: Income may be regarded as “income from employment” or “profits from self-employment/business”. If it is on a self-employed basis, it should be reported under the “Profits” section of Hong Kong Individual Tax Return / Tax Return (BIR60).
• Online shop or side business: If you operate an online shop or provide services in your personal capacity and make a profit, it is generally regarded as a sole proprietorship and the profits should be reported.

8. Why have I not received a Tax Return?

In the following circumstances, the IRD currently considers that you are not required to file a tax return, and therefore will generally not issue a Tax Return to you:

• Your income is relatively low and it is expected that, after the basic allowance, no tax is payable.
• You were not employed or did not have a stable income in that year of assessment.
• You have only just started work or have just graduated, so the IRD has not yet issued you a Tax Return.

However, if you have recently moved or changed address but have not notified the IRD to update your correspondence address, the Tax Return may have been issued but could not be delivered due to an incorrect address.

9. In what situations should I contact the IRD to request a Tax Return?

In the following circumstances, you are advised to proactively contact the IRD to make enquiries or request the issuance of a Tax Return, so as to avoid potential back tax assessments and penalties in the future:

• You have a stable full-time job in the year and your salary is clearly above the basic allowance.
• You have additional sources of income, such as part-time work, freelance work, a side business or rental income from property.
• You have previously filed tax and used to receive a Tax Return every year, but have suddenly not received one this year.
• You suspect that the Tax Return may have been lost or sent to your previous address.

10. What if I completed the Tax Return incorrectly?

It is natural to feel anxious when filing a Tax Return for the first time, which may result in errors or omissions. If you later discover that information was completed incorrectly or that certain income or deduction items were omitted, there are still ways to rectify the situation.

• If you later identify errors or omissions, you may apply to correct or supplement the submitted return. If you have already received an assessment, you may lodge an objection or apply for revision within the prescribed time limit.
• If you filed online via eTAX, you may follow the relevant functions in the system or use the online enquiry channels for guidance on making corrections.

If you only identify the mistake or omission after you have received a notice of assessment, you may lodge an objection or apply for revision of assessment within the prescribed time limit, setting out the grounds and providing the correct information. The IRD will review your case accordingly.

How to complete the Tax Return? Key points for BIR60 and a guide to filing online via eTAX

Filing your first Tax Return need not be as complicated as it may seem. Provided you understand the information that should be reported in the Hong Kong Individual Tax Return / Tax Return (BIR60) and make appropriate use of eTAX for online filing, the completion and submission process can be significantly more straightforward.

How do I complete the Tax Return?

The Hong Kong Individual Tax Return / Tax Return (BIR60) is mainly used to report three major types of income: Salaries Tax, Property Tax and Profits Tax (sole proprietorship). It is also used for electing Personal Assessment and claiming various allowances and deductions.

What should I prepare before completing the form?

It is recommended that you prepare the following documents in advance to help you complete the Tax Return efficiently:

• Employer tax documents: IR56B, IR56E or salary proof
• MPF contribution records: monthly MPF contribution summaries or annual statements
• Supporting documents for deductions, for example:
  • Receipts for Qualifying Annuity Premiums and Tax Deductible Voluntary Contributions (TVC) to MPF schemes
  • Receipts for approved charitable donations
  • Receipts for premiums paid under certified Voluntary Health Insurance Scheme (VHIS) policies
  • Records of home loan interest payments
     
• Personal and family information: spouse’s name and Hong Kong Identity Card number, children’s birth certificates and school information

BIR60 Overview of the main sections

The Hong Kong Individual Tax Return / Tax Return (BIR60) is broadly divided into the following sections:

• Personal particulars and marital status: enter your name, Hong Kong Identity Card number, correspondence address, telephone number, marital status, etc.
• Property Tax section (if you let out property): report rental income from properties owned, rates, outgoings, etc. for computing net assessable value.
• Salaries Tax section (the main section): report all income from employment in the year of assessment, including basic salary, bonus, commission, allowances, etc. All income should be declared on a pre-MPF basis.
• Profits Tax (sole proprietorship): if you operate a business in your personal capacity, you need to report details such as the business name, address, turnover and net profit.
• Claims for deductions and allowances: including the basic allowance, married person’s allowance, dependent parent/grandparent allowance, child allowance, etc. Common deductions include mandatory MPF contributions, Tax Deductible Voluntary Contributions (TVC) to MPF schemes or Qualifying Annuity Premiums, approved charitable donations and home loan interest.

eTAX: benefits of e-filing

• You will generally be granted an automatic one-month extension for submitting the return.
• The system performs automatic calculations, reducing the risk of errors or omissions.
• You can log in at any time to view previously submitted returns and your tax position.

Make good use of deductions to reduce your assessable income

When completing your first Tax Return, in addition to reporting income accurately, you should ensure that you claim all allowable deductions you are entitled to. Examples may include premiums paid under certified Voluntary Health Insurance Scheme (VHIS) policies and Qualifying Deferred Annuity Policy (QDAP) premiums.

If you are exploring whether any tax-deductible arrangements fit your situation, it is advisable to start from your actual needs first—such as whether you want to strengthen your medical protection or plan ahead for retirement—and then check whether the relevant products or contributions qualify for deductions under the prevailing requirements.

• If you are more concerned about protection for future consultations, hospitalisation or surgery, you may first look into the tax deduction arrangement for VHIS premiums; and
• If you would like to plan ahead for your retirement cash flow, you may consider long-term tools such as QDAP and see whether it fits your financial needs and pace.