Form BIR58: Property Tax Return for Corporations in Hong Kong

Form BIR58 Property Tax Return for Corporations Hong Kong

Corporations owning Hong Kong land or buildings and receiving rental income file the Form BIR58 property tax return for corporations Hong Kong. The Inland Revenue Department (IRD) issues this form to companies liable to property tax under the Inland Revenue Ordinance (Cap. 112). Individuals use the BIR57.

On the form, corporations must declare their rental income, the property's assessable value, and any eligible deductions. They must also declare rates paid.

BIR58 Corporate Property Tax Hong Kong: Who Must File

Your corporation must file a BIR58 if the IRD issues one. The corporation cannot self-initiate the filing. The IRD sends the form based on the corporation’s property holdings and rental activity. Report all rental income received during the year of assessment, from 1 April to 31 March.

The BIR58 applies to corporations as the registered owner, the landlord receiving rent, or a company holding property for investment and earning rental income.

If the corporation also carries on a trade or business in Hong Kong and the rental income forms part of that business, it may elect to have the property tax computed under profits tax instead. Make this election in writing to the IRD.

Hong Kong Company Property Tax Return: Key Components

The BIR58 requires the corporation to provide property details: address, lot number, and tenancy period. Rental income is the gross rent received and receivable during the year. The assessable value, the amount on which property tax is charged, is generally the gross rent receivable, less rates and government rent paid by the landlord.

The corporation may claim a concessionary deduction of 20% of the net assessable value after rates and government rent. This statutory deduction under section 7C of Cap. 112 covers repairs, outgoings, and other expenses. No actual expense need be proven.

Provisional property tax is payable on the estimated rental income for the current year, charged at the standard rate of 15%.

The IRD computes the property tax as 15% of the net assessable value after the 20% deduction. This rate applies to both corporations and individuals. A corporation may offset property tax paid against its profits tax liability.

BIR58 Filing Deadline Hong Kong

The IRD issues the BIR58 in early April each year for the preceding year of assessment. For 2024-25, the form is issued in April 2025. The filing deadline is one month from the date of issue, which the IRD stamps on the form. Deliver the completed BIR58 to the IRD within that month.

Late filing attracts penalties. A fine of up to HK$10,000 applies, plus an additional penalty of up to three times the tax undercharged. The IRD may estimate the tax if no return is filed. The BIR58 deadline is independent of the profits tax return (BIR51) deadline, though both may be issued at similar times.

Apply in writing to the IRD for an extension before the original deadline if the corporation needs more time. The IRD grants a one-month extension. Further extensions are rare.

BIR58 Rental Income Corporation: Interaction with Profits Tax

A corporation receiving rental income may elect to have the property tax computed under profits tax instead. Elect when the corporation’s profits tax liability on the rental income is lower than the property tax, or when the rental income forms part of a larger trade or business.

The election must be made in writing to the IRD within the relevant year of assessment. Once made, the corporation is assessed under profits tax for all its rental income. The property tax paid or payable for that year is then offset against the profits tax liability. If the property tax exceeds the profits tax due, the excess may be refunded.

Consider these factors when deciding:

• Profits tax rate: 16.5% for corporations, with 8.25% on the first HK$2 million of assessable profits for qualifying entities. If the rental income forms part of a larger business, the effective rate may be lower when profits are small.
• Deductions: under profits tax, actual expenses are deductible, repairs, management fees, interest, rates, government rent. The 20% concessionary deduction under property tax does not apply. A corporation with high actual expenses may prefer profits tax.
• Capital allowances: if the property is used in a trade, capital allowances on buildings and plant may be claimed under profits tax, reducing taxable profits.

BIR58 vs BIR57: Key Differences for Corporations

Both forms deal with property tax but apply to different taxpayers.

The BIR58 is separate from the profits tax return (BIR51). Both may be issued concurrently. File each return independently.

How to Complete and File BIR58

The BIR58 is a paper form. Complete it in English or Chinese.

1. Enter the property details: address, lot number, tenancy period.
2. State the rental income: gross rent received and receivable for the year of assessment. Include rent, service charges, management fees, and any other payments from the tenant.
3. Deduct rates and government rent: the actual amounts paid by the landlord. The net amount is the assessable value.
4. Apply the 20% statutory deduction: multiply the net assessable value by 80% to arrive at the net chargeable amount.
5. Calculate the tax: multiply the net chargeable amount by 15%.
6. Sign and date. The form must be signed by a director, company secretary, or authorised representative of the corporation.

Mail or deliver the completed form to the IRD’s office at Inland Revenue Centre, 5 Concorde Road, Kai Tak, Kowloon, Hong Kong. Electronic filing is not available for BIR58. The IRD accepts only paper returns for property tax.

Objections and Refunds

Object within one month of the date of the notice of assessment if the corporation disagrees with the assessment. The objection must be in writing and state the grounds, incorrect assessable value, missed deduction, or similar. The IRD may allow a longer period if special circumstances exist.

If the corporation has already paid property tax but later elects for profits tax treatment, claim a refund of the excess. The IRD processes the refund automatically once the profits tax assessment is finalised. Keep all records of rental income, rates, government rent, and supporting documents for at least seven years.

Key Supporting Terms Used

The Inland Revenue Department’s requirements cover BIR58, property tax for corporations, rental income from land or buildings, the assessable value calculation, rates and government rent deductions, the 20% concessionary deduction under Cap. 112, the option to elect for profits tax, the business registration of the corporation, provisional property tax, and the objection process. Refer to the IRD’s official forms index at https://www.ird.gov.hk/eng/paf/bus.htm for the latest version of BIR58 and accompanying notes.