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【Reducing Company Maintenance Costs】Advantages, Conditions, and Application of Dormant Companies

What is the Difference between Accounting and Auditing? How to Distinguish between Their Duties?

In the past, companies without operations could report zero earnings and were not required to provide audit reports. This was commonly known as "zero reporting" in the market. However, since April 1st of last year, all companies, regardless of their income, must submit their tax returns along with supporting documents, including profit tax returns and financial statements, even if the company has had no actual operations or transactions during the fiscal year.

Zero reporting requires an audit report

According to the latest tax guidelines, all Hong Kong registered companies that choose zero reporting still need to provide supporting documents (except for revoked or dormant companies) when submitting their profit tax returns, including an audit report issued by a Hong Kong accountant.

Companies without operations or profits do not automatically qualify as "dormant companies". Companies that are not registered as dormant still need to submit tax returns and complete audits. OneStart offers a "Zero Operation Company Audit and Taxation Package," which includes professional audit reports and tax return submissions. If you need assistance, please contact us or click the WhatsApp button below to inquire with our business consultants.

Definition and requirements of dormant companies

Dormant companies are different from companies without operations. The Inland Revenue Department has specified certain requirements for a Hong Kong company to qualify as a dormant company:

• No business activities
• No assets or liabilities
• No employees or office space
• No bank accounts or transactions

Once registered as a dormant company, you can be exempted from submitting annual returns and financial statements, but you still need to conduct business registration annually.

To learn more about dormant companies, you can visit our other article:

【Reducing Company Maintenance Costs】Advantages, Conditions, and Application of Dormant Companies

No worries with OneStart!

Whether your company is operational or not, OneStart Business Centre's "Accounting‧Audit‧Taxation" one-stop service can assist small and medium-sized enterprises in handling complicated tax matters. For pricing or any other inquiries, please feel free to contact our business consultants.

Conclusion

As the Hong Kong tax season approaches (starting on April 1st every year), companies should timely handle audits and tax filings based on their actual business situations. When submitting tax returns, all supporting documents must be included.

Entrepreneurs should remember to stay updated on these regulations and comply with the relevant tax filing procedures, or seek assistance from OneStart's professional service team.

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