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As Hong Kong’s tax filing deadline of June 2 approaches, residents are urged to review their obligations amid growing scrutiny over recent tax audits allegedly targeting local journalists.
The Inland Revenue Department (IRD) has dismissed claims of bias, asserting that reviews are applied uniformly. Still, concerns raised by the Hong Kong Journalists Association (HKJA), which cited audits involving 20 reporters and their families, have sparked public debate about audit triggers and transparency.
To help taxpayers stay compliant and informed, here’s what to know about tax reporting, freelancing income, and handling audits.
1. Tax Filing: What’s Required and When?
The 2024–25 Individual Tax Return was issued on May 2. Salaries, rental income (from solely owned properties), and sole proprietorship profits must be declared.
- Standard deadline: 1 month from issue (June 2, 2025)
- Extension: Automatic 1-month extension for electronic filing via eTAX
- Further delay: 3-month window for unincorporated business owners
2. What Counts as Taxable Income?
Any income derived from services rendered in Hong Kong is taxable, including:
- Salaries, bonuses, and leave pay
- Cash allowances (e.g., food, transport)
- Stock-based compensation
- Pensions
Exemptions:
- Severance/long-service payments under the Employment Ordinance
- Services rendered outside Hong Kong or during visits ≤60 days
- Income taxed overseas (with documentation)
3. Freelancers and “Slashers”: Salaries or Profits Tax?
The rise of multi-hyphenate workers has blurred lines. According to OneStart and the Taxation Institute of Hong Kong:
- Income from employment → Salaries Tax
- Income from business activities (e.g., content creation, e-commerce) → Profits Tax
Note: Business registration is not required for tax liability. Even informal freelance work can be taxed as business income.
4. Understanding Tax Audits
Following reports of journalists receiving audits, IRD insists audits are driven by data anomalies such as large deduction swings or mismatched reporting, which are unprofessional.
According to tax experts, audits may escalate into complete investigations if tax avoidance, such as the use of offshore accounts, is suspected. Investigations are rare but intensive.
5. Disputing Backdated Assessments
Those disputing tax assessments can file a written objection within one month or through eTAX. While under review, taxpayers are often still required to prepay a portion of the tax.
- Standard resolution time: 1–3 months
- Installments may be granted if the objection fails
Recent journalist cases reportedly involved prepayment demands of up to HK$1 million, reduced to HK$90,000 after appeals.
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