Hong Kong Tax Installment Payment Scheme: What You Need to Know

The Hong Kong tax season has arrived. And as with every year, many of us will be asking whether we’ll be able to muster up the funds to pay the big bill.

Here’s one option to help: you can apply for the Hong Kong tax installment payment scheme if you're facing difficulties in paying your tax on time.

The Hong Kong tax installment payment scheme provides a structured way for taxpayers to manage their tax debts without facing immediate financial strain. By adhering to the agreed payment plan, taxpayers can avoid further penalties and collection actions.

How can I apply to the Hong Kong Kong Installment Payment Scheme?

Here's a streamlined process to guide you:

1. Identify the correct form: Depending on your status:

   • Individual/Sole Proprietorship: Form IR1360

   • Partnership: Form IR1360A

   • Corporation: Form IR1360B

2. Gather required documents:

   • A detailed payment proposal

   • Bank statements/passbook for the latest 3 months

   • Income and expenditure details for the past 3 months

   • For businesses, the latest 3-month management accounts, including profit & loss account and balance sheet, cash flow position, and forecast

3. Fill out the form: You can either download the relevant form and fill it manually, or use the e-Form supporting "iAM Smart" for a digital application.

4. Submit your application:

   • In person: You can submit it at the Collection Enforcement Section at 4/F, Inland Revenue Centre, 5 Concorde Road, Kai Tak, Kowloon, Hong Kong.

   • By mail: Send it to the same address or the specified address provided in the instructions.

   
   

Don't forget to include your daytime contact telephone number to avoid delays in processing.

For additional details, you can also have a look at GovHK’s official guidance.

What Happens After Applying?

Once your application is submitted, the Inland Revenue Department (IRD) will inform you of their decision, which may include:

• Approval of your installment arrangement.

• Request for additional information.

• Discussion of alternative options if your application cannot be approved.

Are there any fees associated with the Hong Kong Tax Installment Scheme?

Surcharges for Late Payments: If you do not adhere to the agreed tax installment payment schedule, a surcharge of up to 5% may be imposed on the outstanding tax amount. Additionally, if the tax remains unpaid six months after the due date, a further surcharge of up to 10% may be added to the total amount due, which includes any previously imposed surcharges [1][2].

No Interest Charges: The IRD does not charge interest on the outstanding tax amounts under the hong kong tax installment scheme itself. However, it is important to note that interest on overdue amounts will continue to accrue if payments are not made on time, which can increase the total amount owed [2].

What else should I consider?

• Be sure the send your application ahead of time so that the IRD has enough time to consider and respond to you.

• Call or email the Inland Revenue Department to confirm they've received your application. You can find the right email address under the IRD webpage.