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Didn't File Taxes - Got Demand Letter - Help...

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  1. #1

    Question Didn't File Taxes - Got Demand Letter - Help...

    Posted this in the taxes section also but it looks like it's very inactive and really need some advice here so I hope I'm not breaking any rules in the forum posting twice

    A long story short.

    Don't live in HK. Setup a company there. Got banking. 100% online business is run.

    Setup the business when things were good in 2016. Things changed and the company does almost zero revenue.

    Can't afford to file taxes or pay an auditor.

    Paid the accountant to try to extend the filing period of the first tax return that was due after 18 months and it was declined. Just got a letter saying it's now over due and $1200HK fine is due.

    Right now I can't deal with this. My focus is to get revenue going again no with this company. Once I do that I can do a capital injection into the company and deal with everything. I can do the books myself as I've done them for years for other companies I've owned and then pay an auditor to do that check to save some money also.

    Right now the focus needs to be to get back on my feet as I have savings, almost no cashflow. But have the know how to get revenue going. But dishing out $1000 to an auditor and paying the fine right now hurts me I need that cash to get revenue going again.

    What is the worst thing that can happen if I don't deal with for say six months? In six months I plan to file taxes and get everything sorted out. Since it's a company that runs 100% off off revenue created outside of HK the 0% tax exemption will be filed and I wont have to pay tax so this is just for the filing of taxes.

    What is the worst that happens if I simply ignore the letters I get and then file everything and catch up in 6 months? Will IRD just not care as I got upto date. I paid the fines and did the filings?

    The letter said upto $10,000HK fine and jail time but that just sounds like typical government nonsense as all governments threaten stuff like that with unpaid things even simple parking tickets.

    Any advice would be great and thanks in advance!

    This is not a cry for help. 2018 has started and I'm hitting it hard to get my revenue up to deal with ASAP. Just really looking for what can happen to the company, or me or what he IRD will likely do to the bank accounts or the company and so on.


  2. #2

    Join Date
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    IRD can take you to magistrates court. You will pay a fine of between 2-10K, usually lower end if first time. Ignore IRD at your peril. IMHO paying their penalty now is cheaper than the court.


  3. #3

    Ok so my accountant said they can deal with this letter. Pay the fine and their fee is $250 total including paying the fine so they are charging $100 to deal with this.

    But I still can't do the tax filings.

    What happens then? How long will this basically extend me out for until they chase it up again?

    Accountant applied for an extension on the filing and it got rejected before.


  4. #4

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    Since you don't live in HK you have a problem. If here you go to see IRD personally and kowtow, instead of submitting a letter via your accountant. They might then give you an extension. Otherwise you have to bite the bullet and file a return with the associated auditing costs. Even if you pay the penalty IRD can still take you to court for not submitting the return.

    z754103 likes this.

  5. #5

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    They might have a better case now, if the company has run a loss.


  6. #6

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    Quote Originally Posted by Flat Hunter:
    IRD can take you to magistrates court. You will pay a fine of between 2-10K, usually lower end if first time. Ignore IRD at your peril. IMHO paying their penalty now is cheaper than the court.
    Correction, IRD WILL Take you Magistrates Court. I had to go and represent a client Company that has still not filed it's returns although the audit is progressing slowly.

    Magistrates Court is not a pleasant experience, they issued a further fine of I think HKD 1,200 and applied an extension of 30 days. I'm waiting for the next summons again.

  7. #7
    Quote Originally Posted by Trebor:
    Correction, IRD WILL Take you Magistrates Court. I had to go and represent a client Company that has still not filed it's returns although the audit is progressing slowly.

    Magistrates Court is not a pleasant experience, they issued a further fine of I think HKD 1,200 and applied an extension of 30 days. I'm waiting for the next summons again.
    Ok so I need to get this document in and pay the 1200HK now then.

    Does that give me an extension. Do you know? If so how long?

    If you get a court date and don't show up what will happen then? I assume they will try to shut down you company right? Seize the bank account and so on.

    Any idea how long that process is from this first letter to when they shut down the bank account and company via court order if you just 100% ignore them? Considering I'm not in the country it's tough for them to do anything really.

    EDIT: Not saying I'm going to do this. That's silly. But it would be good to know a timeline if you've dealt with this and represent clients.

  8. #8

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    Doesn't like a good idea to piss off China with your name to save Hk$1,200.

    My thoughts.


  9. #9

    Join Date
    Jun 2017
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    How about pay your taxes?


  10. #10
    Quote Originally Posted by MandM!:
    Doesn't like a good idea to piss off China with your name to save Hk$1,200.

    My thoughts.
    Agree! That's why I'm planning to get it done and submit the form but looking at the time line of what can happen after.

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