Company carrying on business in Hong Kong is obliged to file the Employer’s Return to Inland Revenue Department (IRD) annually for all its employees. No matter the employee rendered services in or outside Hong Kong.
IRD will send the Employer’s Return (Form BIR56A) to the employers on the first working day of April each year. For newly setup companies, employers will receive Employer’s Return between 3 to 6 months after filing their first audit. Employers require to complete and return the form to the IRD WITHIN ONE MONTH with the IR56B for the relevant employees.
Why is employer liable to submit Employer’s Return?
By law, employers require to file the Employer’s Return of Remuneration and Pensions (Employer’s Return) with the IRD. In respect of each employee, furnishing information such as the employee’s personal particulars and remuneration paid to the employee in the relevant year of assessment, etc.
There are obligations of employer as below:
- Keeping payroll records for at least 7 years
- Submitting annual employer’s return (BIR56A & IR56B) on time, and notifying IRD with notification form IR56E, IR56F and IR56G if there is any status updated.
When to File? Penalties if not able to file on time
Generally, the Employer should file the Employer’s Return WITHIN ONE MONTH from the date of issue. However, employers can apply for extension of time for submission. It will be subject to the approval of Commissioner of the IRD.
The Inland Revenue Ordinance provides heavy penalties for any person who:
- Fails to comply with the requirements of a notice to make a return without reasonable excuse;
- Makes an incorrect return without reasonable excuse;
- Makes a false return with a fraudulent intent to evade tax, or to assist any other person to evade tax; or
- Fails to give notice in writing of a commencement or cessation of employment, or the departure from Hong Kong, of any employee, who is or is likely to be chargeable to Salaries Tax without excuse.
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