Tax Return Arrangements for 2023: How to claim a refund in case of overpayment?

Have you ever thought that you may have paid more tax than you should have?For the tax year 2023, understanding the latest tax refund arrangements is a must for every business and individual tax professional. If you have overpaid tax, you are entitled to a refund. In this article, we will take an in-depth look at the latest tax refund policies and procedures in Hong Kong, hoping to help you get the most out of your tax planning.
Basic Concepts of Hong Kong’s Tax Refund System
According to Hong Kong’s Inland Revenue Ordinance, Hong Kong’s tax refund system is a mechanism to compensate for overpayment of tax. If your tax payment for the tax year exceeds your actual tax liability, you are entitled to apply for a tax refund.

However, the deadline for applying for a tax refund has been adjusted. According to the latest rule, the refund application must be completed within six months after the end of the tax year. This means that for tax year 2023, you have until June 30, 2024 to file for a refund.

Under the new rules, the amount of your refund will be based on the difference between your tax liability and your actual tax payment. If your actual tax payment exceeds your tax liability, you will receive a refund accordingly.
Tax Refund Arrangement for 2023
In the financial year 2023-24, the Financial Secretary of Hong Kong, Mr. Paul Chan, has made public a series of new tax measures. These new policies include the following:

A full refund of salaries tax, subject to a ceiling of HK$6,000, which will cover about 1.9 million taxpayers.
The child allowance and the additional allowance for the year of birth will be increased from $120,000 to $130,000, which will affect about 324,000 taxpayers.
For the first two quarters of the 2023/24 financial year, rates will be reduced by a certain amount, capped at HK$1,000 per quarter per household. 3.03 million residential properties will be covered by this new measure.
How do I apply for a tax rebate?
There is no need to apply for a tax rebate. Simply complete your personal tax return (i.e. BIR60 form) for the financial year 2022/23 as usual. If you have overpaid, the Inland Revenue Department (IRD) will automatically refund the excess tax to you in the form of a check. So, all you need to do is to follow the normal process of filing your tax return and wait for the refund check from the IRD.
Refund of Excessive Taxes?
However, if you think you have paid more tax than you should have, you have the right to file a claim for a refund.

Any person is entitled to a refund within six years of the end of the tax year, or within six months of receiving a notice of assessment, whichever is the later, if he or she can prove that the tax paid exceeds the proper amount of tax due.

Any executor, trustee or receiver has the same power to make an application for a refund under the first clause as the person on whose behalf they are acting (except by reason of death, incapacity, bankruptcy or winding up).

For persons not resident in Hong Kong, if they are assessed in the name of another person and the tax has been paid by that other person, then either that other person or that person not resident in Hong Kong (but not both) may apply for a refund under the first clause. If the refund is made to that other person, the receipt from that other person will be valid evidence of the refund.

The above information is for reference only. If you have any questions or information regarding tax return (personal tax return, corporate tax return, accountant tax return), you are welcome to contact our professional consultants and we will provide you with a free quote and consultation service later.

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