Hong Kong employer’s return, Employers declare and submit salary tax returns

In addition to paying corporate profits tax, employers actually have another important tax responsibility, which is to submit employer tax returns and declare employee information and salary records to the tax bureau from April to May each year. If an employer’s tax return is not submitted, there is a greater chance of being punished by the authorities. Here is an introduction to the employer’s tax return, to understand the methods and precautions for submitting tax returns!

What is the employer’s tax return?

Before explaining what an employer tax return is, everyone should first know the tax responsibilities that the employer needs to fulfill! According to the guidance of the tax bureau, as long as an employer hires employees, they are required to fulfill two tax responsibilities:
1. Keep employee salary records
Employers need to properly keep the following records for a minimum of 7 years and promptly notify the tax bureau of any record updates. The relevant employee information includes:
Nature of employment (e.g. full-time or part-time, and any contract updates)
Employment position
Employer’s personal information (name, address, Hong Kong ID number or passport number, marital status, etc.)
Salary paid
Non cash and other incidental benefits (such as dormitories, vacation trip benefits, share rewards, share subscription rights)
Employees and employers pay contributions to Mandatory Provident Fund schemes (MPF)
Employment contract and subsequent amendments
Employee personal data update (if any. Example: new mailing address, marital status)
2. Declaration of salary/remuneration paid to employees
Although a company or enterprise may inevitably cover employees of various employment modes. However, regardless of which category the employee belongs to, the employer is required to report the employee’s salary details to the tax bureau:
Continuously employed employees
Newly hired employees
Employee’s cessation of employment (or death)
Employees leaving Hong Kong for long or permanent periods
Therefore, employers are required to report the above-mentioned matters and fulfill their responsibilities through their employer tax returns (BIR56A and IR56 forms) every year.

Employer Tax Return Category

Employers need to complete the employer tax return (BIR56A form) every year, along with each employee’s IR56 form, to complete the entire employer tax return.
The IR56 form is divided into 5 sections. Employers are required to fill out appropriate tax returns based on each employee’s situation and provide copies to employees for individual tax purposes.

Form #	Employee situation	Employer’s remarks
IR56B	Continuously employed employees (all married, part-time employees, and directors)	/
IR56E	Newly hired employees	Must be completed within three months of employment
IR56F	Will cease employment of employees (or die)	Must be completed and submitted the one-month before the cease
IR56G	Employees who will be departing for a long or permanent period	Must be completed one month before the employee’s departure date. Starting from the date of filling out the IR56G form, no salary can be paid to the employee until the employee completes the tax clearance procedures and presents the “letter of release” issued by the tax bureau before the remaining payment can be made.
IR56M	Individuals other than employees	Consultants, agents, brokers and freelance artistes, sportsmen, writers etc… (Payments in excess of HK$25,000 per annum)

Deadline for submitting employer tax returns

In general, the tax bureau will send the employer’s tax return (BIR56A) to the employer on April 1st each year, and require the employer to return the BIR56A and the IR56 form to which each employee belongs within one month.
According to official guidelines, if you have not received the form by mid April, or if the form is lost or damaged, you can fill out Form IR6163 to request an employer’s tax return.

Application for extension of submission of employer tax return

If the employer fails to complete the relevant data declaration within one month as expected, they can apply in writing to the tax bureau for an extension of the submission of BIR56A and IR56 forms. When submitting an extension application, the employer needs to list the following items for the authorities to consider:
File number
Company Name
Tax year
Need to extend the deadline
Detailed reasons for delay
Common problems and precautions

Are all employers required to fill out employer tax returns?
Yes. Even if the employer does not have any employee information to declare, they still need to check ‘no’ on the BIR56A form and sign and return the tax return.

What are the consequences of not submitting an employer tax return?
According to the existing guidelines of the tax bureau（ https://www.ird.gov.hk/chi/pol/ppo.htm ）If the employer fails to comply with the relevant declaration requirements (whether it is the submission of the employer’s tax return or the falsification of the declaration information), there is a chance of being prosecuted by the authorities under Article 80 (1) of the Inland Revenue Ordinance, and the employer may be fined HKD 10000 and complete the declaration within the specified time.

Can I modify the submitted IR56 form?
sure. According to official instructions（ https://www.ird.gov.hk/chi/tax/ere_amd.htm ）Employers may choose to submit another revised paper form; Or notify in writing to revise the materials.

Summary
The above is the employer’s tax responsibility in addition to profit tax declaration. Due to the deadline for submitting tax returns, it is recommended that employers process the tax returns as soon as they receive them in April each year to avoid delays. Finally, if you have any questions about the company’s taxation, please contact us for consultation.