Our Expert Tips To Improve Your Tax Filing & Planning Strategy | Article – HSBC VisionGo

Make your tax filing and tax planning seamless and more accurate with these expert tips.

Legal  ·    ·  2 mins read


Every year before the taxes come due, companies spend at least a month in a frenzy, closing accounts, auditing, preparing financial records and, of course, planning for the coming year! This is when the well-organised finally reap the benefit of their year-long efforts to keep the books in order, and this is also when those less careful with their records spend sleepless nights getting their ledgers in shape.  

Regardless of which category you fall into, here are some tried and tested tips from Osome experts that will make your tax filing and strategy planning seamless and more accurate:  

First, let us revisit the two concepts - Tax Filing and Tax Planning. 

Tax filing is the tax return your business has to file as part of its annual compliance with the Inland Revenue Department. The IRD issues three types of annual tax returns - Employer's return, Profits tax return and Individual tax return. Every business owner must file all three to satisfy different compliance needs.

Tax planning is a process of evaluating your company's tax liability to ensure that the organisation is paying as efficient a tax as possible. Planning your tax outlay at the start of the year allows the company to work backwards to manage income as well as expenditure, helping the company become more cost-sensitive and careful. It is also a great way to stay updated with the latest changes in the system such as new laws, allowances or exemptions).

Tip 1. Understand Hong Kong's Tax Compliance Laws

Before you can leverage the tax system for your organisation's benefit, you need to first understand the system's intricacies – which in this case is the HK Tax laws. For example, from 1 April 2018, the government introduced a newly proposed two-tier profits tax system. As per this system, the profit tax rate in HK becomes one of the lowest in the world – reducing from 16.5% to 8.25%. This has been extremely beneficial for start-ups and small companies. However, the IRD, despite the low tax rate, expects organisations and business owners to work hard to file tax returns. There are different types of tax return forms to file and a separate set of compliance requirements for each situation. So, when the IRD sends your tax return form, it is best to consult a professional to figure out the details.  

Tip 2: Always Think About Accuracy 

Filing tax and tax planning is all about accuracy and consistency. The HK law requires all registered companies to file accounts statement and audit reports to the government every year. These are not documents you can make on your own; professional inputs or guidance is critical to ensure accuracy. So, if you don't have a background in tax planning or an understanding of the subject, do consult with a tax expert to get the right picture. 

Accurate accounts and financial reports will not only make your filings error-free but will also help you strategize your long term tax effectively and monitor your flow of expenses and income. 

Tip 3: Stay On Top Of Legal Tax Exemptions And Reduction Strategies

Every business looks for opportunities to save costs, and the Hong Kong tax system gives plenty of generous tax benefits to companies under its jurisdiction. For example, in HK  the nature of the business and its geographical location and reach plays a part in its tax liability. Companies that operate outside of Hong Kong  (while being physically located in Hong Kong) can qualify for tax exemption as offshore companies. If your company passes all the criteria of an offshore company, it can do away with the entire 16.5%  profits tax! Naturally, there is documentation involved, but a professional accountancy firm like Osome can help you make sense of it all and successfully claim offshore status. 

Key Takeaways

  • Tax filing and strategies must become a part of every business's operations.
  • The best way to make your tax filing accurate is by following a consistent system, preferably with professional help.
  • Understand the various details of tax laws to make the most efficient choice for your business. 
  • Stay updated on legal loopholes and tax exemptions to get maximum benefit for your company. 


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Osome Hong Kong
Osome Limited
Osome Limited