District Councilor was Arrested for Late Tax Return: How to Remedy Delayed Tax Submissions

Mr. Li Tin-chi, a Sai Kung District Councilor, was arrested for not attending scheduled court hearing: failing to file property tax return on time.

The case was heard at the Kwun Tong Court on January 20th, where Mr. Li, represented by his lawyer, pleaded guilty and was fined HK$1,000.

Under the Inland Revenue Ordinance, any person who without reasonable excuse fails to file a tax return on time is subject to a fine of HK$10,000and penalty up to three times the amount of the tax undercharged.

Filing tax return on time is a statutory obligation for taxpayers. For individuals, adhering to tax filing deadlines helps avoid penalties.

Common Reasons for Late Tax Filing

Common causes for late tax filing include negligence, oversight, or misunderstanding of tax regulations. Many taxpayers miss tax deadlines due to busy schedules or personal affairs, while others struggle with inadequate documents, such as incomplete financial statements or missing invoices. Lack of awareness of tax procedures or filing requirements can also cause delays. Unforeseen circumstances, such as health issues, family emergencies, or other unpredictable events, may disrupt timely submissions.

Remedy for Late Tax Filing

When taxpayers fail to submit their tax returns on time, prompt remedial action should be taken to mitigate legal and financial risks. Firstly, filing the overdue tax return as soon as possible is the most important action. Taxpayers are advised to proactively contact the Inland Revenue Department (IRD), particularly if the delay is due to special or uncontrollable circumstances, and provide detailed explanation for the delay, and apply for an extension of time to file the return or penalty waiver. If a penalty notice has already been issued, taxpayers should promptly settle the outstanding taxes and penalties to avoid further legal consequences.

Seeking assistance from professional accountant can effectively resolve the above issues. Accountants can help prepare extension applications, communicate with the IRD on behalf of the taxpayer, and improve the chance of successful application for extension or penalty waiver.

For taxpayers who have received recovery notice, accountants can assist in negotiating installment payment plans or other solutions with the IRD to alleviate the taxpayer’s financial pressure. Accountants can also help taxpayer in improving future tax compliance process to ensure submitting tax return timely and prevent recurrence of similar events.

The Right Attitude to Tax Issues

Taxpayers should be proactive and with compliant mindset when handling tax issues, ensure timely submission to avoid legal risk and maintain clean IRD record. In cases of delays, taking immediate remedial action and be accountable are crucial to mitigate potential adversarial consequence. Honesty and accuracy in the tax compliance process is not only a legal obligation but also important element in maintaining clean IRD record.

For complex situations, seeking assistance from professional accountants is recommended to address issues effectively and improve future tax efficiency.