On April 1, 2023, the Inland Revenue Department (IRD) announced changes in the filing of income tax returns. The innovation was called “the beginning of a new era” – although this kind of wording is uncharacteristic for the department.
The main point on which the IRD is betting is to significantly expand the possibilities of electronic submission of documents and for Hong Kong this is a big step forward. A course on digitalization of all organizational processes related to taxation was also officially announced.
Many analysts are inclined to believe that this initiative is a successful and timely attempt to smooth out dissatisfaction in the business environment caused by the partial rejection of the territorial principle of taxation.
The main innovation is the launch of extended services, which actually introduce the option of electronic filing of income tax returns. It is planned to make the tax field more digital and improve the efficiency of Hong Kong’s fiscal policy by significantly reducing the risk of errors when preparing and submitting returns.
Thus, from 2023, Hong Kong companies will be able to pay taxes through the eTAX electronic service:
- the reporting period is 2022/2023;
- additional forms are attached in XML format;
- it is possible to attach additional documents in iXBRL format (Inline eXtensible Business Reporting Language);
- electronic submission of declarations is currently recommended, but not mandatory;
- companies have access to extensive background information posted on the official website of the Hong Kong Inland Revenue Department.
New features and functions available to Hong Kong tax residents from 1 April 2023:
- simplified declaration filling;
- semi-electronic submission format;
- free special tools for preparing documents in the IRD iXBRL format.