News & Publications

"Financial Reporting Considerations for Closing Out 2024" published by HKICPA

February 2025

The HKICPA published the "Financial Reporting Considerations for Closing Out 2024" in February 2025. This educational publication aims to assist entities in preparing their financial statements for the year ending 31 December 2024 by highlighting key financial reporting considerations.

Key Highlights from the Publication

The document is structured into three main sections:

HKFRS Amendments Effective from 1 January 2024
- While no new standards came into effect in 2024, there are amendments to existing HKFRS that entities should consider when preparing their financial statements.
- These amendments may impact recognition, measurement, presentation, or disclosure requirements.
Thematic Discussions
- The publication highlights important macroeconomic uncertainties and their impact on financial reporting.
- It addresses recent legal and regulatory updates that may have accounting implications.
- It discusses climate-related considerations and their connectivity to financial reporting, urging companies to enhance transparency in disclosures.
HKFRS Issued but Not Yet Effective
- This section outlines major new standards and amendments that will become effective on or after 1 January 2025.
- Entities are advised to assess the impact in advance and consider early adoption where applicable.

Key Takeaways

Entities should carefully assess the implications of these amendments and topics on their 2024 financial reports.
Companies are expected to provide clear and specific disclosures in financial statements to ensure transparency and compliance with HKFRS.

For full details, refer to the official HKICPA publication.

Tax measures Proposed in 2025-26 Budget

February 2025

The Financial Secretary has proposed a one-off reduction of profits tax, salaries tax, and tax under personal assessment for the year of assessment 2024/25 by 100%, subject to a ceiling of HKD1,500 per case.

Additionally, the maximum property value eligible for a stamp duty of $100 will be raised from $3 million to $4 million.

Companies Registry releases statistics for 2024

January 2025

The Companies Registry reported that by the end of 2024, the total number of local companies registered under the Companies Ordinance reached an all-time high of 1,460,494, with 145,053 new registrations in 2024.

Companies (Amendment) Ordinance 2025 to take effect on 17 April 2025

January 2025

The Companies (Amendment) Ordinance 2025, effective from 17 April 2025, introduces key reforms to Hong Kong's corporate framework:

Treasury Share Regime: Listed companies can now repurchase their own shares and hold them as treasury shares, offering greater flexibility in capital management.
Paperless Corporate Communication: The ordinance promotes electronic communications by introducing an implied consent mechanism, allowing companies to disseminate information via websites, thereby enhancing efficiency and reducing environmental impact.

These amendments align Hong Kong's practices with international standards, enhancing its competitiveness as a global financial center.

Companies Registry releases statistics for first half of 2024

July 2024

The Companies Registry releases the below statistics for first half of 2024:

66,734 local companies were newly registered
1,440,935 total number of local companies
501 non-Hong Kong companies were newly established
14,959 total number of non-Hong Kong companies

Profits Tax return for 2023-24

April 2024

The IRD issued about 220K profits tax returns, 120K property tax returns and 310K employer's return for the year of assessment 2023-24 on 2 April 2024. About 2.44M tax returns for individuals will be issued on 2 May 2024.

Profits Tax return for 2022-23

March 2023

Profits tax return for the year of assessment 2022/23 will be issued to taxpayer starting from April 2023. There are several updates:

IRD will implement voluntary e-filing of Profits Tax returns alongside with other new e-services and e-filing modes with effect from 1 April 2023;
Exemption granted to small corporations (i.e. gross income not exceeding HK$2 Million) for submitting supporting documents together with Profits Tax return will no longer available with effect from 1 April 2023;
For corporations, only following situation could be exempted from submitting audited financial statements to the IRD with Profits Tax return:
- Dormant companies (i.e. within the terms of the Companies Ordinance); or
- Companies incorporated outside Hong Kong whose laws do not require financial statements to be audited and an auditor's report has not been prepared (with supported by a certificate from tax representative).

Generally speaking, no more Nil Profits Tax return filing is accepted by the IRD unless the taxpayer has apply for dormancy to Companies Registry.

Inland Revenue (Amendment) (Taxation on Specified Foreign-sourced Income) Bill 2022 was passed by the Legislative Council on 14 December 2022

December 2022

On 14 December 2022, the Inland Revenue (Amendment) (Taxation on Specified Foreign-sourced Income) Bill 2022 was passed by the Legislative Council. Summary included followings:

Certain foreign-sourced income may be taxable in Hong Kong, including interest, dividend, disposal gain from the sale of equity interests in an entity (disposal gain) and intellectual property (IP) income;
There are certain exemptions provisions (i.e. Economic Substance Requirement, Nexus Requirement and Participation Requirement.

Please refer to https://www.ird.gov.hk/eng/tax/bus_fsie.htm for further details.

Tax measures proposed in 2022-23 Budget

February 2022

On 23 February 2022, the Financial Secretary proposed certain tax measures in 2022/23 Budget. Include followings:

One-off profits tax, salaries tax and tax under personal assessment for the year of assessment 2021/22, subject to a ceiling of HK$10,000 per case;
Waiver of business registration fee for 2022/23; and
Proposed to introduce a tax deduction, with annual ceiling of HK$100,000, for domestic rental expenses from the year of assessment 2022/23.

Notice for Relocation of Office

September 2021

In order to cope with our expansion, we are pleased to announce that our office has been relocated to the follow address on 9 September 2021:

Unit 1003, 10/F., Tower 2, Silvercord, 30 Canton Road Tsim Sha Tsui, Kowloon, Hong Kong

Our other contact information remain unchanged.

Revenue (Stamp Duty) Ordinance 2021 gazetted

June 2021

The stamp duty payable on contract notes for sale or purchase of Hong Kong stock will be raised from 0.1% to 0.13% of the consideration or value of each transaction payable by buyers and sellers respectively. The rate of stamp duty payable on certain other transfers of such stock will also be raised correspondingly.

The new rate will come into effective on 1 August 2021.

Inland Revenue (Amendment) (Miscellaneous Provisions) Bill 2021 has been passed by the Legislative Council

June 2021

It will implement the tax treatment for amalgamation of companies under the court-free procedures as provided for under the Companies Ordinance; the tax treatment for transfer or succession of specified assets under certain circumstances; refining the statutory framework for the furnishing of tax returns; and enhancing the foreign tax deduction regime.

Abolition of Doubled Ad Valorem Stamp Duty on Non-Residential Property Transactions

November 2020

The Stamp Duty Ordinance will be amended to abolish the Double Ad Valorem Stamp Duty ("DSD") on non-residential property transactions, with effective from 26 November 2020.

Any instruments executed before the effective date remain chargeable to ad valorem stamp duty at the DSD rates. The stamp duty rates for non-residential property transactions is chargeable to Scale 2 rates on and after the effective date.

Profits Tax Treatment of Leases Where HKFRS 16 Applied

September 2020

HKFRS 16 Leases applies with effective from annual reporting periods beginning on or after 1 January 2019. The Commissioner of Inland Revenue has adopted following assessing practice.

Lessor

Remain unchanged since there is no substantial change in accounting treatment for lessors.

Lessee

Both interest on lease liability and depreciation on right-of-use asset charged in the profit and loss account in accordance with HKFRS 16 will be allowed for deduction, subject to the following conditions:

the lease is not a sale for tax purpose;
the deduction related to expenditures/losses that have been incurred/realised; and
the legal characterisation of the expenditures is consideration for the right to use leased assets for a period of time.

However, a lease in relation to plant or machinery is regarded as a sale for tax purposes (e.g. hire purchase), the lessee is eligible to claim interest expense and depreciation allowances under Part 6 of the Inland Revenue Ordinance on the leased asset instead of deduction on the lease payments.

Commencement of Operation of the Companies (Fees) (Amendment) Regulation 2020

September 2020

The Companies (Fees) (Amendment) Regulation 2020 will come into operation on 1 October 2020. The registration fees for annual returns HK$105 fall between 1 October 2020 to 30 September 2022 will be waived. The waiver does not apply to the late filing cases. Furthermore, the fee for incorporation of companies and registration of non-Hong Kong companies through electronic means will be reduced by 10% during the period from 1 October 2020 to 30 September 2022.

Extended Due Date 2019/20 Tax Returns

September 2020

On 9 September 2020, the Inland Revenue Department has announced an extension of the due dates for filing Profits Tax returns for 2019/20 as below:

Accounting Date for 1 December 2019 to 31 December 2019 - 30 September 2020; and
Accounting Date for 1 January 2020 to 31 March 2020 - 30 November 2020.

Extended Due Date 2019/20 Tax Returns

July 2020

On 14 July 2020, the Inland Revenue Department has announced an extension of the due dates for filing Profits Tax returns for 2019/20 as below:

Accounting Date for 1 December 2019 to 31 December 2019 - 15 September 2020.

Proposal for Waiver of Business Registration Fees and Branch Registration Fees for 2020/21

March 2020

The Financial Budget has proposed to waive the business registration fees and branch registration fess for 2020/21 (i.e. 1 April 2020 to 31 March 2021) to reduce the operating cost of business amidst the unfavourable economic circumstances.

Statistics for 2019 - Companies Registry

January 2020

On 12 January 2020, the Companies Registry has release the statistics for 2019 as below:

Total number of local companies - 1,380,185;
Newly incorporated during 2019 - 124,741;
Total number of TCSP licensees - 6,839;
Newly granted TCSP licenses in 2019 - 824;
Total number of non-Hong Kong companies - 12,494; and
Newly registered non-Hong Kong company in 2019 - 2,000.

Commencement of the Non-Hong Kong Companies (Disclosure of Company Name, Place of Incorporation and Members' Limited Liability) Regulation

June 2019

The Non-Hong Kong Companies (Disclosure of Company Name, Place of Incorporation and Members' Limited Liability) Regulation (Cap. 622M) will become into operation on 1 August 2019. Major amendments and clarifications included the followings:

A non-Hong Kong company must display continuously its name and its place of incorporation in legible characters at every business venue of the company;
A non-Hong Kong company must state in legible characters its name and its place of incorporation in every communication document and transaction instrument of the company in Hong Kong;
If the liability of the members of a non-Hong Kong company is limited, the company must conspicuously exhibit a notice of that fact at every business venue of the company and state in legible characters that fact in every communication document and transaction instrument of the company in Hong Kong; and
Some other requirement if the non-Hong Kong company is in liquidation.

The Inland Revenue (Amendment) (No. 2) Ordinance 2019

March 2019

"The Inland Revenue (Amendment) (No. 2) Ordinance 2019 was gazetted on 1 March 2019 which will take effect from 1 January 2020. Major part of the Amendment Ordinance included the followings:

Clarify controlling person in relation to a trust, covers trustees and beneficiaries;
Clarity that controlling persons will be identified;
Provide that the term "investment entity" is consistent with the recommendations of the Financial Action Task Force;
Incorporate the residency rules; and
Add 51 jurisdictions to the list of reportable jurisdictions (in addition to the 75 jurisdictions already included in the current list).

Waiver of Business Registration Fees 2019/20

March 2019

The business registration fee for 2019/20 (i.e. Commencement on 1 April 2019 to 31 March 2020) will be reduced by HK$2,000. The levies for the Protection of Wages on Insolvency Fund HK$250 is still required to be paid. HK$300 penalty will be imposed for the late payment.

Commencement of the "Companies (Amendment) (No. 2) Ordinance 2018"

January 2019

"The Companies (Amendment) (No. 2) Ordinance 2018" will become into operation on 1 February 2019. Major amendments and clarifications included the followings:

Expanding the reporting exemption to holding companies of groups comprising small private companies or eligible private companies and small guarantee companies (mixed groups), with or without non-Hong Kong subsidiaries;
Clarifying the common seal of the company may be engraved with only its English name or Chinese name;
Clarifying the company may display either its English name or Chinese name;
Allowing a holding company to disclose the names of the directors of its subsidiary undertakings on its website, or keeping a list at its registered office and making it available for inspection, instead of disclosing in the director's report;
Allowing the financial year of a company may be shortened or lengthened by a period not exceeding 7 days;
Clarifying the conditions for granting applications for administrative restoration of companies.