Profits tax of a company in Hong Kong is calculated and levied on the assessable profit basis of the company for each year of assessment. The assessable profit can only be determined after the end of the relevant year on the basis of data from the audit report. Therefore, the Inland Revenue Department will issue a tax notice for the year after the end of the year concerned and issue provisional tax for the following year based on the profits of the year concerned. After receiving the next year's provisional tax in advance, the provisional tax paid will be used to offset the assessed profits tax after the assessable profits for the year of assessment are assessed in light of the actual circumstances.

Of course, if the company is not in a position to pay the provisional tax in one lump sum, it can apply in writing for withholding part or all of the provisional tax. However, the application for withholding provisional tax must be submitted to the Inland Revenue Department within the following period.

Before payment of provisional tax28The day; Or after the issue date of the provisional tax demand14Within a day; Whichever is later.

If your provisional tax is payable in two instalments and you have paid the first instalment before the due date, you may still apply for a moratorium on payment of all or part of the second instalment, subject to the application deadlines and reasons set out in the Inland Revenue Ordinance.

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