FAQ : Completion of Profits Tax Returns

Frequently Asked Questions & Answers on Completion of Profits Tax Returns [BIR 51 & BIR 52] issued on or after 1 April 2008

For the benefit of the tax paying public and their tax representatives, some frequently asked questions and their answers are listed below for general information and guidance.

Question(s)

	General Issues	1 - 7
	Conversion Rate	8

Q1	If the company does not have any data for completing the boxes for amounts, can I leave those boxes blank?
A1	No. You must fill in all these boxes. If nil, just enter "0".
Q2	If the amounts shown in the company's financial accounts include cents, should I put in the cents when stating amounts in the Profits Tax return?
A2	No. You should exclude cents when stating amounts.
Q3	How should a figure be inserted in a box?
A3	You should put in the numbers without inserting " , " in between them and align the figure to the right-hand side.
Q4	Will the Department accept photocopies of returns, unsigned auditor's report and unsigned financial statements for return filing purpose?
A4	Photocopy of tax returns and uncertified financial statements are not acceptable for return filing purpose.
Q5	Can I send a correspondence for enquiries and claims together with or in the same envelope that I send the tax returns?
A5	Letters of enquiries, objection, claims (e.g. S.70A, holdover), should be sent under separate cover. Do not staple these letters to returns or bury them among accounts and schedules.
Q6	Is it necessary for a dormant company to prepare audited accounts before completing the return?
A6	Even if you are a dormant company, you still have to submit audited accounts in support of the return unless you are a dormant company within the terms of the Companies Ordinance. Under the Companies Ordinance, a company may pass a special resolution authorizing its directors to make a statutory declaration that the company will become dormant and to deliver a copy of the statutory declaration to the Registrar. Upon delivery of the statutory declaration, the company shall be deemed a dormant company as from the date of such delivery. If the declaration specifies a later date for the company to become dormant, the company shall be deemed as from that later date. A company so deemed is exempt under the Companies Ordinance regarding audited accounts.
Q7	If my business changed from a partnership to a sole-proprietorship or vice versa during the year, should I report such business in the Profits Tax Return (BIR 52)?
A7	The profits/(loss) of the business for the full basis period of the year of change should be reported in the Profits Tax Return (BIR 52) for the partnership file. In subsequent years, the profit/(loss) should be reported in the Profits Tax Return (BIR 52) or Tax Return - Individuals (BIR 60) as the case may be.

Conversion Rate

Q8	If the company's financial accounts are prepared in a foreign currency, what exchange rate should I use for converting the amounts into HK dollars?
A8	You should use the yearly average rate as at the accounts closing date. You can also find the conversion rate for major foreign currencies in this web site.