Form BIR54: Profits Tax Return for Non-Resident Persons in Hong Kong

Understanding Form BIR54 Profits Tax Return for Non-Resident Persons Hong Kong

Form BIR54 is the Inland Revenue Department’s return for individuals, partnerships, or corporate entities not ordinarily resident in Hong Kong that carry on a trade, profession, or business here. BIR51 serves corporations. BIR52 serves persons other than corporations. BIR54 targets those whose Hong Kong tax presence is limited to business activities, not residence.

A non-resident person includes an individual living outside Hong Kong for most of the year of assessment, a company incorporated abroad with no place of central management and control in Hong Kong, or a partnership whose partners are not ordinarily resident. The filing trigger is not residence. It is the carrying on of a trade, profession, or business in Hong Kong. If you operate a Hong Kong branch of a foreign company, provide services from within the territory, or have a permanent establishment here, the IRD will issue a BIR54.

BIR54 Non-Resident Filing Hong Kong

Filing a BIR54 as a non-resident person carries obligations distinct from those of a resident taxpayer. The IRD issues the form to the non-resident person directly, at the business address in Hong Kong or the address of the tax representative.

The return covers the profits tax position for the relevant year of assessment. Report all Hong Kong sourced profits derived from the trade, profession, or business carried on in Hong Kong. This includes income from sales, services, commissions, and royalties. It also captures any other business receipts arising in or derived from Hong Kong.

A non-resident person must also complete and file any supplementary forms accompanying the BIR54, depending on the nature of the activities. A non-resident operating a financial business may need supplementary form S8 (for financial institutions). The IRD’s guide for BIR54 lists which supplementary forms apply.

BIR54 Profits Tax Non-Resident

Profits tax assessed via BIR54 applies to assessable profits arising in or derived from Hong Kong from the non-resident’s trade, profession, or business. The IRD applies the territorial source principle: only profits with a Hong Kong source are taxable. For a non-resident, this principle matters acutely because the entity may earn significant profits outside Hong Kong that are not chargeable.

Hong Kong sourced profits for a non-resident include revenue from selling goods to customers in Hong Kong where the contracts are made and executed in Hong Kong, fees for services performed wholly or partly in Hong Kong, and income from licensing intellectual property for use in Hong Kong.

The return requires a full tax computation showing how you arrived at assessable profits. Deduct allowable expenses, staff costs, rent, professional fees, wholly and exclusively incurred in producing the Hong Kong sourced profits. Claim capital allowances on qualifying fixed assets.

Hong Kong Non-Resident Tax Return

The BIR54 mirrors the structure of BIR51 and BIR52 but includes sections tailored for non-resident persons. Key sections cover particulars of the non-resident person (name, address, business registration number, nature of business), tax representative details, a profit and loss account summarising income and expenditure for the relevant accounting period, the tax computation calculating assessable profits and resulting tax liability, a statement of assets and liabilities showing the financial position of the Hong Kong operations, and any supplementary forms required for specific activities.

The return must be accompanied by audited financial statements of the Hong Kong business operations unless the IRD has granted an exemption. For a non-resident person that is a company, prepare the financial statements in accordance with Hong Kong Financial Reporting Standards (or equivalent) and have them audited by a Hong Kong certified public accountant.

BIR54 Deadline Hong Kong

The filing deadline is stated on the form itself. The IRD issues the return with a specified due date of 1 month from the date of issue. Extensions are available upon application. Request them before the original deadline.

The standard deadline is 1 month from the issue date. Extensions can be granted for up to 6 months for non-resident persons with a business operation in Hong Kong requiring additional time to prepare accounts. To apply, submit a written request to the IRD explaining the reasons, the complexity of the business or the need to finalise group accounts. Late filing without an approved extension can result in penalties under Cap. 112, including a fine and an additional tax assessment.

The IRD issues BIR54 forms in April each year for the year of assessment ending the previous 31 March. For a newly registered non-resident person, the first BIR54 may be issued at any time after the business starts operating in Hong Kong.

Tax Representative and Permanent Establishment

The Companies Ordinance (Cap. 622) and the Inland Revenue Ordinance (Cap. 112) require every non-resident person carrying on business in Hong Kong to appoint a tax representative. The tax representative must be an individual ordinarily resident in Hong Kong or a corporation registered in Hong Kong.

The tax representative receives and files the BIR54, corresponds with the IRD on all tax matters, ensures compliance with Hong Kong tax laws, and handles any objection to an assessment issued by the IRD.

If you have a permanent establishment in Hong Kong, a branch office, factory, or fixed place of business, you are required to file a BIR54. The existence of a permanent establishment creates a taxable presence under the territorial source principle, unless a double taxation agreement (DTA) applies.

Hong Kong has entered into DTAs with many jurisdictions. Under a DTA, a non-resident person may be exempt from Hong Kong profits tax if the business profits are not attributable to a permanent establishment in Hong Kong. You must still file the BIR54 to claim the exemption. The IRD will assess the position based on the terms of the relevant DTA.

Withholding Tax and Business Registration

A non-resident person deriving certain types of Hong Kong sourced income may be subject to withholding tax at source. Common examples include royalties paid to a non-resident for the use of intellectual property in Hong Kong and payments to a non-resident contractor for services performed in Hong Kong. The payer must withhold the tax and remit it to the IRD.

The non-resident person receiving the income must report the gross amount on the BIR54 and claim a credit for the tax withheld when filing. Failure to do so may lead to the full gross income being assessed without the credit.

All non-resident persons carrying on business in Hong Kong must hold a valid business registration certificate. The IRD issues the certificate upon application using Form IRBR1 (for a corporation) or IRBR2 (for a non-Hong Kong company). The business registration number appears on the BIR54 and on all correspondence with the IRD.

Objections and Provisional Tax

If you disagree with an assessment raised by the IRD on the BIR54, lodge an objection within one month of the date of the assessment notice. The objection must be in writing and state the grounds on which you contest the assessment. Common grounds include an incorrect application of the territorial source principle, a miscalculation of assessable profits, or a claim for exemption under a DTA.

Provisional tax is also assessed on the BIR54. The IRD estimates the next year’s assessable profits based on the current year’s figures and charges provisional tax accordingly. If your profits fall in the following year, apply for a holdover of provisional tax using the appropriate form. Late payment of provisional tax attracts interest and a surcharge.

Distinction From BIR51 and BIR52

The BIR54 differs from BIR51 and BIR52 in its starting premise. BIR51 is for corporations ordinarily resident in Hong Kong. BIR52 is for persons other than corporations, sole proprietors and partnerships, that are ordinarily resident. Both forms assume the taxpayer’s residence in Hong Kong.

The BIR54 starts from non-residence. Its sections capture the limited Hong Kong tax presence of the non-resident. The BIR54 includes a specific section for declaring the tax representative and for reporting only Hong Kong sourced profits, rather than the worldwide profits of the entity.

Compliance and Record Keeping

Non-resident persons filing the BIR54 must maintain proper records of their Hong Kong business operations for at least seven years after the relevant year of assessment. Records include books of account, invoices, contracts, receipts, and correspondence with the IRD and tax representative.

The IRD may audit a non-resident person’s tax return at any time. An audit involves a review of the tax computation, supporting documents, and the business registration certificate. If the IRD finds that the BIR54 understated assessable profits, it may raise an additional assessment and impose penalties for non-compliance.

Filing Channels

File the BIR54 electronically through the IRD’s Business Tax Portal or the Tax Representative Portal. Mandatory electronic filing of profits tax returns began on 1 April 2026 for relevant entities of in-scope multinational enterprise groups, from the year of assessment 2025-26. For other non-resident persons, paper filing remains available. The IRD encourages electronic submission to reduce processing time and errors.

When filing electronically, tag the financial statements and tax computation in iXBRL format. This requires accounting software or a third-party provider that supports iXBRL tagging. The IRD provides a list of approved software vendors on its website.

Where to Find the Form

The official Form BIR54 is available on the Inland Revenue Department’s forms index. Download the form itself, accompanying notes, and supplementary forms. Always download the latest version from the IRD’s website. Forms are revised periodically and using an outdated version may result in rejection.

For specific advice on your circumstances, consult a Hong Kong tax professional or the Inland Revenue Department directly.