IRD Warns On Consequences Of Delaying Hong Kong Tax Payments

by Mary Swire, Tax-News.com, Hong Kong

29 December 2011

Hong Kong’s Inland Revenue Department (IRD) has advised taxpayers to pay promptly their tax assessed for the 2010/11 fiscal year, which is generally falling due in the coming January.

The IRD urges taxpayers to note their due dates as stated on their demand notes and make prompt payments. It has pointed out that it pays to pay tax on time to avoid penalties and the inconvenience that might be caused by recovery actions it may have to take.

With no prior notice being given, default in tax payment can lead to the following recovery action by the IRD – the second instalment tax becoming due at once; the immediate imposition of a 5% surcharge, plus a further 10% surcharge on sums remaining unpaid six months after due date; and recovery from third parties (including employers, banks, tenants or debtors).

The IRD’s action could also mean the institution of civil proceedings in court; an application to prevent the defaulter from leaving Hong Kong, and a petition for bankruptcy/winding up order against the defaulter.

However, taxpayers with financial difficulties in settling their tax bill by the due date may write to the IRD to apply for payment by instalments. If approved, surcharges will be imposed on tax remaining unpaid after the due date.

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