Filing the individual tax return form is obligatory for all the tax payers in Hong Kong. BIR60 form is for the individual tax payers in Hong Kong and it covers, property tax, salaries tax and profits tax of individuals. According to IRD, you can consider this form as your income tax return. In the case that a BIR60 form is served to you, it is mandatory for you to fill out and return irrespective of the lack of earnings to declare. However, it is better to be return the form without any mistakes to avoid heavy penalties and hassles because you don’t get much time to return the file. But, don’t worry! This article will help you to have the clear understanding of how to file the BIR560 form accurately in few minutes.
Ways to File BIR60 Forms
Firstly, you have to choose which ways you are using to return the form. There are two ways to file BIR560 forms, paper filing and e-filing.
Paper Filing
For paper filing, you can use the original BIR60 form sent to you by the IRD. Photocopies or fax copies of tax returns are NOT acceptable. Filing a copy of the BIR60 which was downloaded from the Internet is also NOT acceptable. You can send it by post to GPO Box 132, Hong Kong or submit in person during office hours to our office (Inland Revenue Centre, 5 Concorde Road, Kai Tak, Kowloon, Hong Kong).
e-Filing
By choosing the e-filing method, you can have the benefit of an automatic extension of 1 month for filing. To use e-filing, you will need to open an eTax account first. Requirements can be checked here. Before going to the filing stage, you are suggested to read the BIR60 sample form. So that, you can identify the key points first.
How to File BIR60 Form
There are 10 parts in total that you need to fill out correctly in returning BIR60 form. Here are the tips to complete the form that ensures accuracy.
1.Personal Particulars
A spouse is your legal partner under Hong Kong law or any legally recognized marriage elsewhere. If you or your spouse obtains a HKID Card later, notify the department within one month. Immediately inform the department in writing if you change your postal address or marital status after submitting your return.
2.Notification
Check the appropriate box if any item applies and complete the relevant sections in the Appendix. Check box 4 if you have appointed a representative. Notify the department of any changes in this appointment after filing. Check box 6 and fill out Section 3 of the Appendix if you are claiming relief under a Double Taxation Arrangement.
3. Property tax
Report only the details of properties you solely own, as registered in the Land Registry, and that were rented out during the year. Do not report rental income from properties you jointly own; separate Property Tax Returns will be issued for those. If you rented out more than two solely owned properties, provide additional details on a separate sheet. Executors should declare income from a deceased owner’s properties in the return issued to them as executors. Electing for Personal Assessment may reduce your tax liability.
4.Salaries Tax
Report all income from Hong Kong, including salary, part-time work, and pensions, before deducting retirement contributions. Declare the total income in box 29, even if claiming a tax exemption or relating back a lump sum. Enter any excluded amounts in box 33 and complete Sections 2 and/or 4 of the Appendix.
5.Profits Tax
Report all sole proprietorship businesses, active or not, in this section. If you have more than two, provide details on a separate sheet. For dormant businesses, complete items (1) and (2) and enter ‘0’ in items (3) to (9). Declare profits or losses for the basis period, which is the year ending March 31 or the accounting period ending within the assessment year.
6. Deemed Assessable Profits
You must tick box 64 and declare deemed assessable profits in Section 9 of the Appendix if:
- The assessable profits of a non-resident entity you or your associates own 30% or more of are tax-exempt under sections 20AC/20ACA of the Inland Revenue Ordinance.
- For the 2019/20 assessment year onward, the assessable profits of a fund you or your associates own 30% or more of are tax-exempt under section 20AN.
- For the 2019/20 assessment year onward, the assessable profits of a special purpose entity in which the above fund has an interest are tax-exempt under section 20AO.
Refer to Schedules 15, 15A, 15C, and 15D of the Inland Revenue Ordinance and the ‘Related Tax Rules’ on the Department’s website for details on calculating deemed assessable profits.
7. Personal Assessment
Individuals aged 18 or older, or under 18 with deceased parents, who are residents in Hong Kong, can elect for Personal Assessment. Married couples can jointly elect for Personal Assessment if both have income assessable under the Inland Revenue Ordinance. If only one spouse has assessable income, that individual can elect for Personal Assessment alone. For couples jointly assessed under Salaries Tax, both must make the Personal Assessment election together.
8.Deduction for interest payments
If you chose Personal Assessment, you can deduct interest paid on a loan for acquiring property in Hong Kong that was rented out. Enter your share of the interest, which should match your ownership percentage but the deduction cannot exceed the property’s net assessable value. Interest for periods when the property was not rented (e.g., used as a residence or vacant) is not deductible.
9.Qualifying Annuity Premiums and MPF
Hong Kong offers various tax allowances and deductions, including personal allowances, MPF, self-education expenses, elderly care, and charitable donations. Ensure you know which deductions apply to you and include them. A tax adviser can help maximize your deductions and allowances.
10.Declaration
This section is where you sign the BIR60 form. If you’ve chosen joint assessment with your spouse or if your spouse has authorized you to claim the home loan interest deduction, your spouse also needs to sign.
Consulting with Professionals to File BIR60
You can avoid any future mistakes by following the tips given in this article. However, consulting with the professionals can assure to give you the ideas beyond your understanding and make the whole process easier for you. Fastlane HR can guarantee to help you with the experts who are the ace in doing taxes and help you to focus solely on your business.