How to file a Hong Kong profits tax return (BIR51): step by step

How profits tax works, in brief

Hong Kong taxes profits on a territorial basis. Only profits arising in or derived from Hong Kong from a trade, profession or business carried on here are chargeable, and profits from selling capital assets are not. Tax is charged for each year of assessment (1 April to 31 March) on the profits of the basis period, which is normally the financial year ending in that year of assessment. Corporations pay 8.25% on the first HK$2 million of assessable profits and 16.5% on the rest; unincorporated businesses pay 7.5% and 15%. See the two-tiered rates guide for the connected-entity rule.

Step by step: filing the return

1. 1

   Step 1: Know when your return will arrive

   

   The IRD generally issues a new company's first profits tax return about 18 months after incorporation, though it can issue a provisional return earlier. After that, returns for active files are bulk-issued on the first working day of April (1 April 2026 for 2025/26). If you have taxable profits but haven't received a return, you must tell the IRD in writing that you are chargeable within 4 months after the end of the basis period. New businesses in particular should watch for this.

2. 2

   Step 2: Work out your deadline

   

   The due date is printed on the return: normally 1 month from issue, or 3 months for a first return. If a tax representative lodges the return under the block extension scheme, the 2025/26 dates are:

   Accounting year-end	Paper	E-filed
   1 Apr – 30 Nov 2025 (code N)	No extension	4 Jun 2026
   1 – 31 Dec 2025 (code D)	31 Aug 2026	2 Oct 2026
   1 Jan – 31 Mar 2026 (code M)	30 Nov 2026	30 Dec 2026
   Code M with a loss for the year (on application)	1 Feb 2027	1 Feb 2027

   The D and M dates were extended by IRD circulars of 14 July and 20 October 2026. There is more detail in profits tax return deadlines.

3. 3

   Step 3: Get the accounts audited

   

   A company must support its return with audited financial statements. The exceptions are dormant companies under the Companies Ordinance, and some non-Hong Kong companies whose home law does not require an audit. You submit a certified copy of the balance sheet, the auditor's report and the profit and loss account for the basis period. Start early, because the audit needs your year-end books; see the bookkeeping guide and audit requirements.

4. 4

   Step 4: Prepare the tax computation

   

   The computation starts from the accounting profit and adjusts it to assessable profit, with schedules showing each adjustment. Typical items:

   • Offshore and capital items: profits not sourced in Hong Kong and gains on capital assets are taken out. A claim that profits are offshore needs facts to support it.
   • Add back expenses that are not deductible, such as private or domestic expenses, capital expenditure and accounting depreciation.
   • Claim allowances instead of depreciation: for example, a 60% initial allowance on plant and machinery, a 100% deduction for computer hardware and software, and refurbishment costs spread over 5 years.
   • Approved charitable donations are deductible up to 35% of assessable profits.
   • Losses: the return shows this year's assessable profit or adjusted loss only. The assessor deals with losses brought forward, so don't net them off on the return.
5. 5

   Step 5: Complete the return (BIR51)

   

   • Show amounts in Hong Kong dollars without cents.
   • Enter the 6-digit Hong Kong Standard Industrial Classification (HSIC) code for your main business.
   • The assessable profit or adjusted loss on the return must match the tax computation and cover the current year only.
   • To use the two-tiered rates, complete Supplementary Form S1 (person electing for two-tiered profits tax rates). Other forms cover items such as transfer pricing (S2) and research and development (S3).
   • Supplementary forms must be filed electronically, as data files uploaded through the Business Tax Portal or Tax Representative Portal, even when the main return goes on paper.
6. 6

   Step 6: Sign and submit, on paper or online

   

   • Paper: sign the return and send it with the certified financial statements and the tax computation.
   • Electronic: through the Business Tax Portal, upload the supplementary forms and supporting documents, complete the return, then sign and submit it. Save or print the acknowledgement. A semi-electronic mode lets you prepare the return online and sign a printed simplified return.
   • More time for e-filing: filing voluntarily online earns a further month, on application at least 7 working days before the due date.
   • Using a service provider: they may prepare and file the return, but you sign a confirmation (IR1476) that it is correct. The company stays responsible.
7. 7

   Step 7: After filing: assessment, payment and records

   The IRD issues a notice of assessment showing the final tax for the year and, usually, provisional tax for the next year based on this year's profits. Pay by the dates on the notice. If you expect next year's profits to fall, you can apply to hold over some of the provisional tax. Keep the return, the computation and the supporting records for 7 years.

What it costs

The IRD does not charge a fee for filing a profits tax return. The costs are the tax itself, the audit and the accounting work behind the return.

Worked example (illustration only). A company with no connected entities and assessable profits of HK$2,500,000 for 2025/26: 2,000,000 × 8.25% = HK$165,000, plus 500,000 × 16.5% = HK$82,500, so HK$247,500. The 2025/26 one-off reduction (100% of the tax, capped at HK$3,000) brings it to HK$244,500.

Professional costs depend on the state of the books, transaction volume, whether you hold stock or have overseas income, and how long the audit takes. BizAion's published fees: bookkeeping from HK$1,000 a year (by bank transaction count) and audit arrangement by turnover:

Fees above are BizAion's professional fees in HKD. Government fees, auditor's fees and other third-party costs are charged separately at cost. The auditor quotes their own fee. Tell us your year-end and turnover for a quote covering the full year: accounts, audit arrangement and tax filing.

What happens if you file late

If a return is not filed by the due date, the IRD may issue an estimated assessment or take penalty action. Failing to file a return in time without reasonable excuse is an offence under section 80(2) of the Inland Revenue Ordinance: a fine of HK$10,000 plus up to treble the tax undercharged, and the court can order the return to be filed. Instead of prosecuting, the IRD can impose additional tax under section 82A of up to treble the tax undercharged. The IRD warns that persistent late filers are almost certain to face penalty action. Extensions beyond the block extension dates are granted only in exceptional circumstances.

Mistakes that cause IRD enquiries

• Assessable profit on the return not matching the computation.
• Losses brought forward netted off on the return.
• Amounts shown with cents or in a foreign currency.
• A missing S1 or other supplementary form, or one sent on paper.
• Financial statements that are not certified copies.
• An offshore claim with no supporting facts.