How provisional tax works in Hong Kong

Provisional Tax Hong Kong

Provisional tax is an advance payment for the current year of assessment, collected before the Inland Revenue Department issues the final tax assessment. The Department calculates the amount using the assessable profits or income from the preceding year to estimate the current year's tax payable. You will receive a single tax bill containing both the final tax for the previous year and the provisional tax for the current year.

Hong Kong Provisional Tax Payment

The provisional tax payment is split into two instalments. The first instalment is due when you pay the final tax for the preceding year of assessment. The second instalment is payable approximately three months later. The Inland Revenue Department sets the exact dates on your notice of assessment.

Provisional Profits Tax Hong Kong

For businesses, provisional profits tax is calculated on the estimated assessable profits for the current year. The Department uses the profits from the preceding year as the basis for this estimate. Your previous year's tax computation therefore directly determines the size of your provisional tax demand.

Provisional Salaries Tax Hong Kong

For employees, provisional salaries tax follows the same principle. The Department estimates the current year's tax payable using the income from the preceding year. If you received a tax assessment for the previous year, you will see a provisional salaries tax charge on the same tax bill.

IRD Provisional Tax Notice

The Inland Revenue Department includes the provisional tax notice in the combined tax assessment. The notice of assessment shows the final tax for the preceding year and the provisional tax for the current year as separate line items. The total amount payable is the sum of both charges. Object to the assessment within one month of the notice date if you disagree.