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Illustrative Examples
Entity A is a Hong Kong constituent entity of MNE group X. The accounting period with respect to which Entity A prepares its financial accounts and with respect to which its ultimate parent entity (“UPE”) prepares the consolidated financial statements are both made up to 31 December. MNE group X is an in-scope MNE group for the fiscal year ended 31 December 2025.
| From | To | |
| Basis period of Entity A for year of assessment 2025/26: | 1 January 2025 | 31 December 2025 |
| Corresponding fiscal year of MNE group X: | 1 January 2025 | 31 December 2025 |
Entity A would be mandated to e-file its profits tax returns for the year of assessment 2025/26 and subsequent years of assessment. This is because Entity A is a phase 1 applicable entity and MNE group X is an in-scope MNE group for the fiscal year corresponding the year of assessment 2025/26 (i.e. the fiscal year ended 31 December 2025).
Entity B is a joint venture of MNE group X that is located in Hong Kong. The accounting period of Entity B is different from that of the UPE of MNE group X. The financial accounts of Entity B are made up to 1 April while the consolidated financial statements of the UPE of MNE group X are made up to 31 December. MNE group X is an in-scope MNE group for the fiscal year ended 31 December 2025.
| From | To | |
| Basis period of Entity B for year of assessment 2025/26: | 2 April 2024 | 1 April 2025 |
| Corresponding fiscal year of MNE group X: | 1 January 2025 | 31 December 2025 |
Entity B would be mandated to e-file its profits tax returns for the year of assessment 2025/26 and subsequent years of assessment. This is because Entity B is a phase 1 applicable entity and MNE group X is an in-scope MNE group for the fiscal year corresponding to the year of assessment 2025/26 (i.e. the fiscal year ended 31 December 2025).
Entity C is a non-material constituent entity of MNE group X that is located in Hong Kong. The accounting period of Entity C is different from that of its UPE. The financial accounts of Entity C are made up to 31 March while the consolidated financial statements of its UPE are made up to 31 December. MNE group X is an in-scope MNE group for the fiscal year ended 31 December 2025.
| From | To | |
| Basis period of Entity C for year of assessment 2024/25: | 1 April 2024 | 31 March 2025 |
| Corresponding fiscal year of MNE group X: | 1 January 2025 | 31 December 2025 |
Entity C would not be required to e-file its profits tax return for the year of assessment 2024/25 because the first phase of mandatory e-filing requirement applies to a profits tax return for the year of assessment 2025/26 or after. If Entity C remains a non-material constituent entity of MNE group X, it would be required to e-file its profits tax returns for the year of assessment 2025/26 and subsequent years of assessment.
The facts are the same as Example 3. MNE group X is no longer an in-scope MNE group for the fiscal year ended 31 December 2026.
| From | To | |
| Basis period of Entity C for year of assessment 2025/26: | 1 April 2025 | 31 March 2026 |
| Corresponding fiscal year of MNE group X: | 1 January 2026 | 31 December 2026 |
Entity C would be mandated to e-file its profits tax returns for the year of assessment 2025/26 and subsequent years of assessment. This is because Entity C is a phase 1 applicable entity for the fiscal year corresponding to the year of assessment 2025/26 (i.e. the fiscal year ended 31 December 2026) (corresponding fiscal year) while MNE group X was an in-scope MNE group for the fiscal year that is preceding to the corresponding fiscal year (i.e. the fiscal year ended 31 December 2025).
The facts are the same as Examples 3 and 4. During the fiscal year ended 31 December 2026, Entity D is acquired by the UPE of MNE group X and becomes a Hong Kong constituent entity of MNE group X. The accounting period with respect to which Entity D prepares its financial accounts and with respect to which its UPE prepares the consolidated financial statements are the same.
| From | To | |
| Basis Period of Entity D for year of assessment 2026/27: | 1 January 2026 | 31 December 2026 |
| Corresponding fiscal year of MNE group X: | 1 January 2026 | 31 December 2026 |
Entity D would be mandated to e-file its profits tax returns for the year of assessment 2026/27 and subsequent years of assessment. This is because Entity D is a phase 1 applicable entity for the fiscal year corresponding to the year of assessment 2026/27 (i.e. the fiscal year ended 31 December 2026) (corresponding fiscal year) while MNE group X was an in-scope MNE group for the fiscal year that is preceding to the corresponding fiscal year (i.e. the fiscal year ended 31 December 2025).
Entity E is a Hong Kong constituent entity of MNE group Z. The accounting period with respect to which Entity E prepares its financial accounts and with respect to which its UPE prepares the consolidated financial statements are both made up to 1 April. MNE group Z is an in-scope MNE group for the fiscal year ended 1 April 2026.
| From | To | |
| Basis period of Entity E for year of assessment 2025/26: | 2 April 2024 | 1 April 2025 |
| Corresponding fiscal year of MNE group Z: | 2 April 2024 | 1 April 2025 |
Entity E would not be required to e-file its profits tax return for the year of assessment 2025/26 because the fiscal year of MNE group Z corresponding to the year of assessment 2025/26 begins on a date before 1 January 2025. Since MNE group Z is an in-scope MNE group for the fiscal year corresponding the year of assessment 2026/27 (i.e. the fiscal year ended 1 April 2026), Entity E would be mandated to e-file its profits tax returns for the year of assessment 2026/27 and subsequent years of assessment.
Example 7 (New):
MNE group Y has four Hong Kong constituent entities, namely Entity F, Entity G, Entity H and Entity I. The consolidated financial statements of the UPE of MNE group Y are made up to 30 June each year. Meanwhile, the accounting periods of the four entities differ from that of the UPE and their financial accounts are made up to four different dates as outlined below:
| From | To | |
| Accounting period of Entity F | 1 May | 30 April |
| Accounting period of Entity G | 1 August | 31 July |
| Accounting period of Entity H | 1 January | 31 December |
| Accounting period of Entity I | 1 April | 31 March |
MNE group Y is an in-scope MNE group for the fiscal year ended 30 June 2026. The basis period of the four entities for the year of assessment 2025/26 and the relevant corresponding fiscal year of MNE group Y are outlined below:
| From | To | |
| Basis period of Entity F for year of assessment 2025/26: | 1 May 2024 | 30 April 2025 |
| Corresponding fiscal year of MNE group Y: | 1 July 2024 | 30 June 2025 |
| From | To | |
| Basis period of Entity G for year of assessment 2025/26: | 1 August 2024 | 31 July 2025 |
| Corresponding fiscal year of MNE group Y: | 1 July 2025 | 30 June 2026 |
| From | To | |
| Basis period of Entity H for year of assessment 2025/26: | 1 January 2025 | 31 December 2025 |
| Corresponding fiscal year of MNE group Y: | 1 July 2025 | 30 June 2026 |
| From | To | |
| Basis period of Entity I for year of assessment 2025/26: | 1 April 2025 | 31 March 2026 |
| Corresponding fiscal year of MNE group Y: | 1 July 2025 | 30 June 2026 |
Entity F would not be required to e-file its profits tax return for the year of assessment 2025/26. This is because the relevant corresponding fiscal year of MNE group Y (i.e. the fiscal year from 1 July 2024 to 30 June 2025) began on a date before 1 January 2025. However, since MNE group Y is an in-scope MNE group for the following corresponding fiscal year (i.e. the fiscal year from 1 July 2025 to 30 June 2026), Entity F would be required to e-file its profits tax returns for the year of assessment 2026/27 and subsequent years of assessment.
In contrast, Entity G, Entity H, and Entity I would be required to e-file their profits tax returns for the year of assessment 2025/26 and subsequent years of assessment. This is because the corresponding fiscal year of MNE group Y for the year of assessment 2025/26 (i.e. the fiscal year from 1 July 2025 to 30 June 2026) begins on a date on or after 1 January 2025, and MNE group Y is an in-scope MNE group for that corresponding fiscal year.
Example 8 (New):
Entity J is a Hong Kong constituent entity of MNE group W, which is headquartered outside Hong Kong. The UPE of MNE group W is located in a jurisdiction that implemented the income inclusion rule with effect from 1 January 2024. Both Entity J and its UPE adopt a 52-week accounting period. For the years of assessment 2025/26 and 2026/27, their financial accounts and consolidated financial statements are made up from 30 December 2024 to 28 December 2025, and from 29 December 2025 to 27 December 2026, respectively. MNE group W is an in-scope MNE group for the fiscal years ended 28 December 2025 and 27 December 2026.
The basis periods of Entity J for the years of assessment 2025/26 and 2026/27 and the relevant corresponding fiscal years of MNE group W are outlined below:
| From | To | |
| Basis period of Entity J for year of assessment 2025/26: | 30 December 2024 | 28 December 2025 |
| Corresponding fiscal year of MNE group W: | 30 December 2024 | 28 December 2025 |
| From | To | |
| Basis period of Entity J for year of assessment 2026/27: | 29 December 2025 | 27 December 2026 |
| Corresponding fiscal year of MNE group W: | 29 December 2025 | 27 December 2026 |
Entity J would not be required to e-file its profits tax return for the year of assessment 2025/26 because the relevant corresponding fiscal year of MNE group W (i.e. from 30 December 2024 to 28 December 2025) began on a date before 1 January 2025. However, Entity J would be required to e-file its profits tax returns for the year of assessment 2026/27 and subsequent years of assessment because the corresponding fiscal year of MNE group W for the year of assessment 2026/27 (i.e. 29 December 2025 to 27 December 2026) begins on a date after 1 January 2025, and MNE group W is an in scope MNE group for that corresponding fiscal year.