Tax filing alert – a key factor that greatly affects tax amount!

After deducting all company expenses, the Inland Revenue Department will collect “profits tax” from the company’s net profit. In order to maximize the deductible expense, it is essential to keep supportings properly. The most important thing is to know the following tips!

．Keep receipts to save money
It is common sense to keep receipts for business meals, but remember that not all receipts are the same. Credit card receipts are not official documents, and restaurant receipts or handwritten receipts must be kept. According to the Hong Kong Companies Ordinance, the financial statements of limited companies must be audited by an accounting firm every year. The accountant will prepare the company account based on bank monthly statements, income and expense proofs, sales receipts, etc., and then pass to auditor to conduct an audit. If there are more unclear or confusing accounts, the accounting fee and audit fee will be higher. The most common situation is newbie bosses relying on themselves to “check the numbers”, resulting in messy receipts. When trying to reconcile accounts, they end up paying an additional 30-40 thousand dollars in fees.

Developing a habit of keeping receipts, from rent, wages, entertainment expenses to electricity and water expense, all company expenses are supported by valid receipts/invoices. When preparing financial statements, you don’t need to pay extra fees.

．Conclude the director’s salary wisely
Taking a limited company as an example, the company and the owner are two independent entities. If the owner is also a director, do not withhold salary for yourself due to business instability or fear of trouble. To enjoy tax benefits, ask accountant to compare the “personal income tax” and “company profits tax” rates, before determine the proportion of the director’s salary and company dividends. The company reports taxes every year from August to November, and the decision of whether or not the director will receive a salary must be made before personal tax filing in April. Consult with an accountant early and don’t miss out on the tax deductions you deserve!

Welcome to contact us for enquiries MAXI TAX 2761 0139

WhatsApp & Wechat: (852) 5236 2580

Website: http://www.maxi-solution.com/

WordPress: https://maxisolution.wordpress.com

#knowledgeable about tax returns #IRD #profits tax #credit card slip #Companies Ordinance #financial statements #audit #rent #payroll #entertainment #utilities #personal assessment #CPA #director remuneration #tax #tax filing #tax #accounting #Maxi #limited company #unlimited company