What to do when receiving a letter from Inland Revenue Department?

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Many people started worrying when they received a letter from Inland Revenue Department. Before freaking out, you should first check the file number on the upper left corner of the letter. They mostly starts from 4A, 4B, 4C.  With this file number it shows IRD opened the tax audit and investigation file regarding to your company.

Inland Revenue Department Investigation focus on 3 major categories:

  • Tax investigation – Inland Revenue Department is preforming a very serious case and taxpayer will be investigated on all years under concern and potentially sued for criminal prosecution
  • Field audit – most cases are field audits, using projection method based on one year results
  • Anti-avoidance – preventing taxpayers from using aggressive tax avoidance schemes

How to interpret the Inland Revenue Department file number?

In fact, the file number will actually show a lot of important information, such as severity, investigation nature and so on

4B8-A246810-ABC(37)

  • 4B8 represents the taxpayer case as a criminal prosecution group and the general Revenue Department will require taxpayers and legal representative to attend the meetings
  • 4C6 / 4C7 represents taxpayer cases as anti-tax avoidance groups, and the common case is that taxpayers use past aggressive tax avoidance practices
  • Second subdivision of A123456,
    • A represents Anti-avoidance、
    • B represents Tax investigation、
    • C represents Field audit
  • The last part (37) represents the Floor of Inland Revenue Tower:
    • 37/F criminal prosecution case
    • 10/F Field audit
    • 35/F Tax investigation and Field audit

 

Inland Revenue Department will normally take about three months to two years, depending complexity of your case . If the taxpayer can fulfill required information, then IRD will closed the case accordingly.​

 

For further information, please contact us

You may also read: Centre O  ANNUAL SERVICE FEE OF ACCOUNTING, AUDITING AND TAX FILING

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