Taxpayers who encounter financial difficulties in settling their tax bills on time may apply to the Inland Revenue Department (IRD) for payment of tax by installments before the due date of the tax demand notes.
The IRD provides that a surcharge of not exceeding 5% on the amount of tax outstanding after the due date may be imposed and a further surcharge of not exceeding 10% may also be imposed on the amount remaining unpaid (including tax and 5% surcharge already imposed) after 6 months from the due date.
The IRD will grant installment plans of different duration taking into account individual taxpayer's financial position. Installment plans are generally granted for a duration of 6-month or less. Only in special circumstances will the installment plans be granted for a longer duration but they are generally not longer than 12 months.
In light of the prevailing economic condition and the financial difficulties that some taxpayers (including individuals and companies) might be facing, the Government announced on 4 December 2019 a further relief measure on tax payment. For installment plans approved by the IRD allowing taxpayers in financial difficulties for settlement of Salaries Tax, Profits Tax and Personal Assessment demand notes issued between December 2019 and December 2020 for the Year of Assessment 2018/19, provided that the installment plans are duly adhered to, no surcharge will be imposed for a maximum period of one year counting from the respective due dates of the demand notes.
Taxpayers can find more information on how to apply for conditional waiver of surcharges for installment settlement of demand notes by following the link: https://www.ird.gov.hk/eng/tax/cws.htm
