Employers have statutory obligations to report remuneration paid to an employee. Failure to comply with the requirements is a serious offence which carries penalty of a fine of HK$10,000.
So what are the specific regulations? This article has made the following summary for your reference:
IR56B: The return on remuneration and pensions is only applicable to employees who are still employed on 31st March. (if you have reported the remuneration to the inland revenue department in form IR56F/G, do not complete form IR56B again.)
IR56F:Notice of cessation of employment by an employee shall be submitted one month before the date of cessation of employment by the employee (please fill in IR56G if the employee is leaving Hong Kong)
IR56E:Notice of commencement of employment is applicable to new employees only. Please submit this form to the tax authority within 3 months from the date of employment.
IR56G:Notice of employee's departure from Hong Kong to be submitted one month before the departure of the employee (the employer shall not pay any money to the employee within one month after the submission of this form to the tax authority)
IR56M:Notification of remuneration paid to persons other than employees
Reporting remuneration paid to an employee
Depending on the employment condition as prescribed above, IR56B, IR56E, IR56F or IR56G should be completed and filed for the relevant year of assessment for each of the following persons:-
employees (including labourers, workers etc. whether daily paid or otherwise, and employees who have received remuneration through service company arrangements), whether resident in Hong Kong or not, whose total income is in excess of the basic allowance of the relevant year (if employed for less than a year, a proportionately reduced amount);
directors, married persons and part-time employees who were likely to have other income chargeable to Salaries Tax for the year, irrespective of the amount paid and whether resident in Hong Kong or not;
employees of any non-Hong Kong company who were assigned or seconded to your company during the year for duties in or outside Hong Kong;
persons to whom a pension was paid or accrued during the year. In case of those pensioners who have left Hong Kong permanently, only pensions in excess of the basic allowance of the relevant year need to be reported; or
former employees and former directors who, during the year, have realized gain by the exercise, assignment or release of any share option previously granted by the employer or by any other corporation in respect of their former employment with or former office in the employer. In the case of those former employees who did not have any other income chargeable to Salaries Tax for the year, only the gain realized in excess of the basic allowance of the relevant year needs to be reported. If share awards are vested in an employee after cessation of employment, an amendment to the IR56 form previously filed should be made by either filing a “Replacement” or a written notification of amendment.
Reporting remuneration paid to persons other than an employee
1. Local persons (Form IR56M)
If a company pays commission, fees or other remuneration to the following local individuals who are not the company’s employees or unincorporated businesses: -
(1) sub-contractors exceeding $200,000 per annum; or
(2) consultants, agents, brokers, freelance artistes, entertainers, sportsmen, writers, freelance guides, etc. in excess of $25,000 per annum. IR56M should be filed for each of the recipients together with the declaration form IR6036B.
2. Non-resident entertainers/sportsmen (Form IR623)
Where payments are made to non-resident entertainers/sportsmen for any performance in Hong Kong, the sponsor or agent has to comply with the following requirements: -
(1) notify this Department via IR623 immediately when the non-resident arrives in Hong Kong; and
(2) withhold an amount from payments made to the non-resident sufficient to produce the amount of tax due in accordance with sections 20A and 20B of the IRO and inform this Department accordingly.
3. Non-resident professionals (Form IR623P)
A payer may submit Form IR623P to report sums payable to non-resident individuals who are engaged to provide services or exercise profession in Hong Kong, not in the capacity as employees. Examples include non-resident individuals rendering services in Hong Kong as arbitrators, consultants, visiting counsel and lecturers.
Further Information and Assistance
If you need further information or assistance, you may：－
1. visit the Department’s website at www.ird.gov.hk;
2.obtain specimens of completed Employer’s returns and notifications through the Department’s website at
www.ird.gov.hk/eng/tax/ere.htm#02_2 or the ‘Fax-A-Form’ Service (2598 6001);
3. download forms IR56B/E/F/G/M, IR6036B, IR623 and IR623P from the Department’s website at
www.ird.gov.hk/eng/paf/for.htm or obtain the forms from the ‘Fax-A-Form’ Service (2598 6001)Note (Form must be printed
on white plain A4 size paper);
4. write (G.P.O. Box 132, Hong Kong) or fax (2877 1232) to the Assessor, quoting your Employer’s File Number and
day-time contact telephone number;
5. telephone 187 8022; or
6. call in person at the Central Enquiry Counter on 1/F of Revenue Tower, 5 Gloucester Road, Wan Chai, Hong Kong.
Note: Form IR623P is not available from ‘Fax-A-Form’ Service.