Does An Unlimited Company Need To Keep Accounting Records?

JULY 1, 2023

Understanding Hong Kong's Tax Laws

In conducting business in Hong Kong, whether as a limited or unlimited company, one must pay attention to Hong Kong’s tax laws. Among these, the requirement for the preservation of accounting records is an important provision.

Requirement under Section 51C of the Inland Revenue Ordinance

According to Section 51C of the Inland Revenue Ordinance in Hong Kong, all taxpayers operating in Hong Kong must keep all business records for at least 7 years. This includes unlimited companies that need to keep all accounting records, such as receipts, invoices, bills, etc.

Possibility of Accounting Records Inspection

While companies do not have to actively report these accounting vouchers, the Commissioner of Inland Revenue still has the right to request the taxpayer to provide such documents when necessary. This means that if the Commissioner requests to check your accounting records, you must be able to provide all relevant records for the past 7 years.

Penalties for Non-compliance

A violation of this provision without a reasonable explanation may lead to a maximum fine of HKD 100,000. This shows how important it is to keep complete and accurate accounting records, not only to comply with legal requirements but also to avoid potential fines.

Conclusion: Importance of Compliance with Section 51C

In conclusion, whether you are a limited or an unlimited company, you should strictly comply with the provisions of Section 51C of the Inland Revenue Ordinance, ensuring that all accounting records are properly kept for at least 7 years. If you have any questions about these provisions, it is recommended to consult legal or tax professionals for more detailed information.