How do I hold off on the provisional tax payment? What are the application requirements to have a good chance of success?

The tax season starts in May each year, and after tax assessment, taxpayers are required to pay two instalments. If the taxpayer fails to pay the tax due to sudden changes in the working environment and economic pressure, you can try to apply to the Inland Revenue Department for a deferral of tax payment to help you get through financial difficulties, and this article will introduce the deferral of tax payment in detail. How to apply for tax payment.

How to apply for a holdover of provisional tax payment?

If a taxpayer wants to apply for deferment of provisional tax payment, the Inland Revenue Department currently only accepts applications in the form “IR1121”, which can be downloaded from the Inland Revenue Department’s website.

• By post (address is “P.O. Box 28487, Gloucester Road Post Office, Hong Kong”, please ensure that the postage is sufficient);

• Fax (to fax number 2519 6896);

• You can apply for a holdover of provisional tax electronically through your eTAX account.

Deadline for applying for holdover of provisional tax payment?

For the above-mentioned postponement of provisional tax payment, the application form must be submitted to the Inland Revenue Department for processing within the following deadlines, whichever is later:

• 28 days before the due date for payment of provisional tax; or

• within 14 days from the date of issue of the notice for payment of provisional tax;

If the taxpayer has already paid the first instalment of tax in two instalments, you can still apply for a deferment of all or part of the second instalment, but you must comply with the application deadlines and reasons specified in the Inland Revenue Ordinance.

Application conditions

The application for deferment of provisional tax payment requires sufficient and reasonable reasons. After reviewing the situation, the Inland Revenue Department may approve the deferral of payment. According to salaries tax, profits tax and property tax, the reasons for the three have a higher chance of successful application are as follows:

Provisional Salaries Tax

• For the year of assessment of the provisional tax, the taxpayer will have an uncalculated allowance (as shown in the allowance for children with newborn children in the following year);

• For the year of assessment for provisional tax, the taxpayer has more deductible amounts (e.g. self-education expenses, qualifying premiums for VHIS policies, and such expenses exceed the amount specified in the previous year);

• The taxpayer’s taxable income for the next year of assessment is or may be less than 90% of the actual taxable income for the previous year;

• The taxpayer has ceased or ceased to earn salary income during the provisional tax year of assessment (e.g. unemployment, retirement, and salary reduction)

• The taxpayer has lodged an objection to the previous year’s salaries tax assessment.

Provisional Profits Tax

• The taxpayer’s assessable profits are or may be less than 90% of the previous year’s assessable profits, or less than 90% of the provisional tax year of assessment. (must provide signed accounts for at least 8 months);

• any omission or inaccuracies in the amount of any loss carried forward to the year of assessment to be set off;

• The taxpayer has ceased to carry on your trade, profession or business and the assessable profits to be assessed for the year of assessment are less than the assessed profits for the previous or next year.

• You have objected to the profits tax assessment for the previous year.

Provisional property tax

• For the provisional tax year of assessment, the assessable value of the taxpayer’s property is or may be less than 90% of the assessable value of the previous year, or less or may be less than the provisional tax year of assessment of 90% of the estimated assessable value;

• the taxpayer is no longer the owner of a property, or will cease to be the owner of the property before the end of the provisional tax year of assessment, thereby reducing the assessable value of the provisional tax;

• The taxpayer has opted for personal assessment for the provisional tax year of assessment, and you may pay less tax in this way;

• The taxpayer has lodged an objection to the previous year’s property tax assessment.

The above information is for reference only. If you have any questions about tax declaration and accounting, we welcome your inquiries.