Inland Revenue Department of Hong Kong collects the record sum of taxes

03.10.2012

The commissionaire of the Hong Kong Inland Revenue Department Chu Yam-Yuen has introduced the 2011-2012 Annual Report highlighting that the sum of collected taxes is higher by 14% in comparison to the previous year.

Thus, in 2011-2012 238,3bn HKD (30,7bn USD) that is an increase of 29,3bn HKD comparing to the previous year. Increase of tax collection sums mainly come from income tax and profit tax. Profit Tax collection soared by 27% up to 118,6bn HKD while income tax collection climbed 17% (51,8bn HKD).

Meanwhile Stamp duty collection decreased by 13% (6,6bn HKD) and stood at the level of 44,4bn HKD.

On the basis: http://www.ird.gov.hk/eng/ppr/are11_12.htm

Expert’s opinion

I suppose that many countries will be encouraged by success of the Hong Kong tax authorities that effectively managed to plan tax policy.

What is exactly the secret of the Hong Kong’s success? Firstly, in current years the audit and investigation department made huge efforts in counter fighting against tax avoidance schemes which prospered till entering into force of Inland Revenue (Amendment) Ordinance 2004. In particular, in 2011-2012 the Inland Revenue Department of Hong Kong held several inspections of suspicious schemes the result of which were sufficient sums of tax recoveries.

Secondly, it is astounding that such results were achieved without staff increase. The main accent was made on the intensive use of informational technologies in business-operations. For instance, in 2011 the tax authorities launched the service of filing the declarations for employers (eTAX platform). In April 2012 this service was extended by the possibilities of filing the annual tax declarations. Moreover, the Business Registration Office and the Companies Registry jointly presented the online service which helps companies to renew data on address of the registered office operatively.

That’s why it won’t be exaggeration to claim that the economics of Hong Kong rather gains because of incorporating of new legal entities, in other words, profitable taxpayers! Don’t hesitate to contact us on questions of company registration in Hong Kong to our specialists who will consult You on benefits of business incorporation in this jurisdiction and will prepare the legal opinion.

Julia Akhmetova ( Paralegal of Moscow office company Honest & Bright)