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How to calculate profit tax in accounting audit of Hong Kong company?

Released Date: Jun 19,2021 Article Source: HUANZE

In the process of accounting and auditing of Hong Kong companies, everyone should be most concerned about whether to pay tax this year, how much to pay and how to calculate? How is the sharing tax calculated?

Accounting and accounting in Hong KongHong Kong corporate auditWhat we are most concerned about is whether we need to pay tax this year, how much and how to calculate it? How is the sharing tax calculated?

inHong Kong corporate audit, the Inland Revenue Department of Hong Kong authorizes audit firms to calculate profits tax in the audit report. The Inland Revenue Department will issue tax advice based on the tax calculated in the audit report. It is very important to make clear the tax calculation in the audit report of the company in Hong Kong.

In the calculation of profits tax, the Hong Kong auditor shall, on the basis of the total profits in the accounting, multiply the amount of taxable income confirmed after tax adjustment by the corresponding rate of profits tax to calculate the amount of profits tax payable.

Take, for example, the average corporate profit derived entirely from Hong Kong:2020/2021The total profit realized for the year of assessment is300Ten thousand Hong Kong dollars, the bank interest income for the year was1Hk $10,000, without any other tax adjustment, then2020/2021How much profit tax is payable in the year of assessment?

In Hong Kong, the interest income obtained from the funds deposited in the bank does not need to be subject to profits tax, so tax adjustment should be made. The taxable income amount of profits tax should be adjusted=300wan-1wan=299For HK $10,000, two tax rates such as16.5%More than200Hk $10,000 income sum8.25%(before200Hk $10,000 income). So299Ten thousand Hong Kong dollars need to be calculated separately.

The amount of profits tax payable=200*8.25%+99*16.5%=16.5+16.3=32.810,000 Hong Kong dollars.

Only by fully understanding the tax calculation of the audit report can we know how much tax the enterprise needs to pay in that year and arrange funds reasonably.

How to calculate profit tax in accounting audit of Hong Kong company?

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