Waiver of Surcharges for Installment Tax Payments

 In Hong Kong

In light of the prevailing economic condition and the financial difficulties that some taxpayers might be facing, on 4 December 2019 the Financial Secretary of the HKSAR announced another series of special relief measures which include waiver of surcharges for instalment tax payments.

Surcharge is waived for applications under the above special relief measures. However, the applications are only applied to the year of assessment 2018/19 with the tax demand notes issued between December 2019 to the year 2020. The maximum period for surcharge waiver is one year counting from the tax payment due date.

The applications are applied to payments of profits tax, salaries tax and tax under personal assessment. In respect of an application by a company for profits tax payment, it should be in writing and with the following documents provided to the Inland Revenue Department (“IRD”) for consideration:

  1. A concrete payment proposal (e.g. number of instalments, payment amount and payment due date of each instalment).
  2. Copies of the last 3 months bank statements.
  3. The last 3-month management accounts including profit and loss account and balance sheet.
  4. Cash flow position and forecast.

Applicants should be alert of the payment deadline stated on the tax demand notes and allow ample time for the IRD to process the applications.

A taxpayer should duly adhere to an approved instalment plan. In case of any default in payment, the approved plan will be cancelled and a surcharge of 5% or 10% will be imposed on the outstanding amount.

Please feel free to contact us for more detailed discussion.