Tax for dependents

[MovingIn07]

A couple of questions if you know the answers to these:
* Do dependents have to chase the tax office for a tax return or is it ok just to wait until the tax office 'finds' them? (In this instance dependent is self employed). Not worried about rack up back-taxes, only about penalties or fines etc.
* If you are self employed but do a portion of work wholly outside HK (ie you fly off and work and get paid only for that work outside HK) is this taxable in HK? Does the answer change if you also do some stuff inside HK?

Any thoughts?

[PDLM]

1. I think you need to ask for the forms. The mechanism by which they should find you is that if the dependant's business is more than a certain size (HK$25K in a year I think) then they should have registered that business, probably as a "sole proprietor". Once they do that they they will be on the IRD's radar. Strictly you are required to register within a short period of starting the business.

2. In principle I think not, but obviously you will need to have good documentation to demonstrate this. For stuff done partly in and partly out you can do some pro rating of taxes in some circumstances.

The IRD website has quite a lot of stuff on it, and [email protected] has always been helpful for me.

In my experience, if you are up front with IRD and clearly aren't hiding anything then you always seem to end up with the most lenient interpretation of the tax rules. But if they get the impression you are trying to hide something then they can become a lot more difficult. Given how low tax is here anyway then I reckon it's best always just to be fully open with them.

[MovingIn07]

So someone who is self-employed as a sub-contractor is deemed to have a business here, even if it's not a real business?

[Claire ex-ax]

From the IRD:

If your income is derived from the buying and selling of goods, or from the providing of professional or personal services, you are considered as carrying on a trade, business or profession and a self-employed person. To put it simply, you are a self-employed person if you work for yourself and are not employed as an employee.

A self-employed person may be a sole-proprietor or a partner of a partnership business.

You also have to cough up for MPF contributions.