Tax Audit – Field Audit and Tax Investigation

Company Taxation Services
Hong Kong Taxation: WS CPA Limited Provides Professional Tax Consulting Services

“Low tax rates and encouragement of business” have always been the policies of the Hong Kong government. In addition to many advantages that cannot be compared with other countries and regions, Hong Kong provides the most ideal business environment for enterprises in terms of taxation, helping investors expand their businesses.

As a professional consulting company based in Hong Kong, WS CPA Limited has rich experience in taxation, accounting, auditing, risk management, tax filing, and more. We can meet various needs of enterprises, effectively solve problems for investors by combining industry characteristics, and achieve their visions.

The tax investigation and consulting team of WS CPA Limited is composed of Hong Kong tax consultants with many years of experience and a thorough understanding of Hong Kong tax regulations. They have rich practical experience and can help clients solve tax investigation problems, identify risks and opportunities in business operations based on a deep understanding of their clients’ businesses and industries. We help clients improve compliance and obtain the most tax incentives.

Our consultants are committed to designing innovative and comprehensive tax solutions for each client with a professional and rigorous attitude, and can provide professional advice on issues such as cross-border group taxation and personal taxation to help clients find tax-saving opportunities.

 

 

Professional Tax Services in Hong Kong: Tax Planning, Tax Investigation, and More

Our tax services include:

Application for extension and objection
Tax litigation
Corporate tax planning services
Corporate tax investigation and consultation
Personal tax planning in Hong Kong
The main types of taxes levied in accordance with the Hong Kong Inland Revenue Ordinance are as follows:

  • Profits tax
  • Salaries tax
  • Property tax

Tax investigation services (Tax Audit – Field Audit and Tax Investigation)
If your company receives a letter from the Inland Revenue Department with a file number starting with 4A, 4B, or 4C, it means that you have unfortunately been investigated by the department. At this time, you should appoint WS CPA as your tax representative to deal with the Inland Revenue Department. The processing time usually takes three months to two years, depending on whether the taxpayer can provide the information required by the department to conclude the case.

The Inland Revenue Department regularly publishes judgment and prosecution cases online to warn other taxpayers.

At WS CPA Limited, we provide professional and comprehensive tax services to help clients meet their tax obligations and achieve their business goals. Contact us for more information on how we can assist you with tax planning, tax investigation, and other tax-related matters in Hong Kong.

https://www.ird.gov.hk/chi/ppr/pca.htm

Tax Audit – Field Audit and Tax Investigation: Understanding the Three Categories

Tax audits are an important process for ensuring compliance with tax laws and regulations. There are three main categories of tax audits: tax investigation, field audit, and anti-avoidance. Tax investigation is the most serious category and may result in criminal prosecution. Field audits are the most common and involve examining one year’s tax return and then extrapolating the results to other years. Anti-avoidance audits are designed to prevent taxpayers from using aggressive tax planning strategies.

The file number for a tax audit contains important information, such as the severity of the case and the nature of the investigation. For example, the letter at the beginning of the file number indicates whether the case falls into the tax investigation, field audit, or anti-avoidance category.

During a tax audit, the tax authority may use various methods to evaluate the taxpayer’s tax liability, including asset betterment analysis, bank account analysis, and income projection. The tax audit process typically involves a background check, data collection, an initial interview, a site visit, and the submission of a settlement proposal.

WS CPA can assist taxpayers during a tax audit by reviewing accounting records and tax returns, preparing bank deposit and withdrawal analyses, examining the company’s financial ratios, and accompanying the taxpayer to meetings with the tax authority. Failure to comply with tax regulations can result in fines or even imprisonment, depending on the severity of the offense.

In Hong Kong, the severity of the offense determines the amount of the fine, which may range from 3% to 260% of the tax due. Taxpayers who fail to report income due to negligence will receive a lower fine than those who deliberately conceal information.

It is important for taxpayers to understand the tax audit process and to seek professional advice if they are facing an audit. By working with WS CPA, taxpayers can ensure that they are fully prepared and can minimize the risk of penalties and fines.