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Tel：+86 400 118 5939For a long time, the issue of auditing (also known as auditing) of Hong Kong companies has not been given much attention. Most entrepreneurs, after registering a Hong Kong company, due to a lack of understanding of Hong Kong tax laws and to reduce some maintenance costs, directly declare zero or no tax on Hong Kong companies. What would be the result if the actual operating company fails to issue an audit report in accordance with the Company Law and Tax Law during the declaration process? Is it really that serious? Generally speaking, the penalties that Hong Kong companies will face vary depending on the degree of delay, mainly including the following aspects.
1. Hong Kong companies face fines and penalties
Failure to file tax declarations in a timely manner by Hong Kong companies will result in fines and additional fees for overdue tax payments. If the first installment of taxes is not paid on time, the tax bureau will impose a 5% surcharge on all outstanding taxes (including the second installment), and the second installment of taxes will be considered immediately due. The tax bureau will impose an additional 10% fee if the tax is not fully paid after 6 months from the tax payment date. In addition, there will be fines of HKD 1200 and HKD 3000.
2. Hong Kong company sued
If left untreated, the final punishment will be for the defendant to go to court. The tax department can apply to the regional court to issue a summons, file a civil lawsuit against the debtor, and recover the overdue taxes. Taxpayers who owe taxes must not only pay the overdue taxes at the time of judgment, but also be responsible for paying court fees, fixed litigation costs, and interest from the start of the claim lawsuit to the date of full payment of the judgment debt. If the debt determined by the court is still unpaid, the tax bureau may apply for a debtor's property seizure warrant to seize the taxpayer's movable property; Or the taxpayer's real estate may be subject to a charging order, and even the tax bureau may file an application for bankruptcy/liquidation.
3. Hong Kong company's bank account frozen
As local banks in Hong Kong become increasingly strict in regulating existing local bank accounts, they will regularly issue investigation letters requesting Hong Kong companies to submit the latest annual audit reports. If Hong Kong companies fail to submit them in a timely manner, their bank accounts may be frozen.
4. Hong Kong company shareholders prevented from leaving the country
6. Not conducive to Hong Kong companies engaging in international cooperation
In international business cooperation, credit review of partners is a crucial step. The audit report of a Hong Kong company can reflect its business situation and demonstrate its strength and integrity to its partners.
From the above content, it can be seen that Hong Kong companies that fail to timely audit and declare taxes as required will face numerous penalties. It is recommended that Hong Kong companies pay attention to their tax declarations to avoid trouble and losses.
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