You might get confusedWhy do Hong Kong companies do audits, because most small and medium-sized enterprises in China do not need to do auditing, only need to do the annual income tax settlement, and the company law in the mainland does not require all companies to do audit reports.

However, as an international commercial and financial center, Hong Kong has a very sound corporate law system1933The Companies Ordinance was enacted in 2005 and, after several amendments, formed the Companies Ordinance currently in operation in Hong Kong. In the Ordinance at No 9 In the Ministry, it is stipulated that unless a Hong Kong company meets the reporting exemption, all other companies are required to submit the audit report of a Hong Kong company. If the Hong Kong company fails to submit the audit report on time in accordance with the law and is verified by the Hong Kong government, it may be fined by the Hong Kong government, and the government will require the Hong Kong company to make up the payment within a limited time. If the Hong Kong company still fails to provide relevant reports, the Hong Kong government will Sue the company. Therefore, if you set up a company in Hong Kong, you must submit the audit report of the company in Hong Kong as required on time, so as to avoid being sued by the government and resulting in relevant legal liabilities for the principal and owner of the company in Hong Kong.

In addition to the requirement of the Hong Kong government to submit audit reports, the Hong Kong Tax Bureau also requires Hong Kong companies to submit audit reports on time. In mainland China, the enterprise income tax of small and medium-sized enterprises is generally settled by the enterprises themselves, and then declared to the tax bureau. Finally, the enterprises pay the enterprise income tax according to the declared data.

However, Hong Kong is different, because the company in Hong Kong does not calculate the profits tax by itself, but in the audit report issued by the company in Hong Kong, the auditor will calculate the profits tax according to the customer's accounts. After the tax table is issued by the Hong Kong Tax Bureau, the tax table and the audit report will be submitted to the tax bureau together. The Hong Kong Tax Bureau will check the profits tax of the enterprise, and then issue a tax notice for Hong Kong enterprises to pay profits tax in accordance with the law. Therefore, if your Hong Kong company does not do the audit or does not do the audit on time, not only will there be a fine, but also the directors and shareholders of the Hong Kong company will face legal risks.

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