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All you should know before filing Hong Kong Employer Return

Employers in Hong Kong are obliged by the Inland Revenue Department to file an Employer’s Return yearly. If you don’t know how to file Hong Kong Employer Return, this article will outline completing and filing the Employer’s Return in Hong Kong.

What is Employer Return in Hong Kong?

Employer Return, also known as BIR56A and Form IR56B, are annual reporting disclosures issued by the Hong Kong Inland Revenue Department (“IRD”) to Hong Kong employers to facilitate the IRD’s correct assessment of the employee’s salary tax liabilities for the period April 1 to March 31 of each year. A Hong Kong boss must reveal their employees’ compensation data and personal particulars when submitting an Employer’s Return. The employee’s name, the nature of their work and the capacity they are employed, the amount of cash remuneration, and details such as non-monetary and fringe benefits are all relevant information. Any modifications to these facts from the previous Employer Return filed by the Hong Kong employer must also be notified. After completing an Employer Return, the form must be signed by the Hong Kong Company. The individual in charge of signing the Employer Return is determined by the firm type of the Hong Kong Employer. The IRD will routinely send Hong Kong employers hard copies of their Employer Returns, which they can complete and return via physical delivery. However, effective September 25, 2019, the IRD has begun allowing Hong Kong employers to prepare and upload their Employer Returns and subsequent files using self-developed software. Employers in Hong Kong that desire to submit their Employer Returns in this format should ensure that their self-developed software meets the IRD’s standards. Employers can also use the IRD’s Employer’s Return e-Filing Services (“ER e-Filing Services”) to file their Employer Return for free.

Requirements for submitting employer return

Annually, Forms BIR56A and IR56B must be submitted to the Hong Kong Inland Revenue Department (IRD). Every year on April 1st, the Department issues these forms.

The tax duties begin the moment you hire your first employee. As a result, you must record that employee’s personal information, kind of employment, designation, cash remuneration offered, non-monetary benefits, and employer and employee contributions to the Mandatory Provident Fund (MPF), or its equivalent.

Employers must also keep business accounting documents, including payroll records, for a minimum of seven years.

If an employee’s personal information or employment terms change, the employer must notify the Inland Revenue Department as quickly as possible.

Employer’s Return Form

When filling out Form BIR56A, you must provide the following information:

  • The name and location of the company
  • Name of the officer responsible for filling out the Employer’s Return Number on the IR56B forms that have been filed; and
  • The forms were submitted in the following ways: in print, online, or a combination of the two.

The following employees must complete Form IR56B:

  • Workers who have earned salary through service business agreements), whether resident in Hong Kong or not, with a total income of more than HKD 132,000 in a fiscal year (if employed for less than a year, a proportionately reduced amount).
  • Directors, married people, and part-time employees with other income subject to Salaries Tax, regardless of income and residency.
  • Employees from any non-Hong Kong corporation were assigned or seconded to the company for duties in or outside Hong Kong throughout the financial year.
  • Employees who get a income through a financial year.

If a corporation employs freelancers, the pay given to such outworkers must be disclosed in Form IR56B and filed with the Inland Revenue Department.

The following information is required on Form IR56B:

  • Personal details of the employee
  • Place/title in the organization, as well as the income, aids, and income established
  • Forms IR56B should be filed in numerical sequence, with surnames listed first, followed by additional names.

While the employee’s H.K. Identity Card No. is required, a passport number and the location of the issue can be provided if the individuality card amount is not accessible.

However, once the identity card number is confirmed, the employer must notify the Inland Revenue Department.

Risk of non-compliance

Employers who fail to submit the IR56B, report incorrect information, or satisfy the reporting obligations without justifiable cause will face penalties (often HHKD10,000) under section 80(1) of the Internal Income Ordinance.

If the filing requirements are not met, the Commissioner has the authority to apply relevant penal provisions, depending on the severity of the infraction, under the rules of the Inland Revenue Ordinance. ​

Conclusion

Businesses must ensure that the Employer’s Return is filed and submitted on time to avoid penalties. The Employer’s Return must include the employee’s personal information and remuneration facts. Completing an Employer’s Return in Hong Kong entails quite a bit of documentation. Employers in Hong Kong must be continually aware of their numerous reporting responsibilities. It is critical information for every Hong Kong employer.

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