{"id":25061,"date":"2025-04-24T03:58:38","date_gmt":"2025-04-24T03:58:38","guid":{"rendered":"https:\/\/www.genacct.com\/nil-tax-return\/"},"modified":"2026-06-24T09:59:33","modified_gmt":"2026-06-24T09:59:33","slug":"nil-tax-return","status":"publish","type":"post","link":"https:\/\/www.genacct.com\/en\/nil-tax-return\/","title":{"rendered":"[Zero-Declaration Tax Return] Can you file a zero return if the company has no operations? Myths about filing for dormant companies"},"content":{"rendered":"\t\t
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Nil filing is a common misconception among owners of non-operating companies. Many start-ups mistakenly believe that if a company has not done any business, it does not need to submit a tax return, or that it can submit a blank return or fill in \u201c0\u201d in every field.<\/p>

This article explains the requirements for nil filing and for applying to become a dormant company, helping you avoid incorrectly filing a \u201czero return\u201d. It will also clarify the tax responsibilities under nil filing and explain how to file taxes when your company has no income, so you can handle company tax filing<\/a> correctly.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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    What is a Nil Tax Return?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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    Nil filing (English: Nil Tax Return) refers to entering \u201c0\u201d in all fields on the Profits Tax Return. The company also does not conduct an audit for that financial year, and when submitting the BIR51 Profits Tax Return, it does not submit an audit report, profit and loss statement, tax computation, or other supporting documents.<\/p>

    Further reading: Accounting and Tax Filing Services<\/a><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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    Can a company with no business\/no operations file a nil return?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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    No. Even if the company has no operations or income, it does not meet the requirements for nil filing unless it has successfully applied to the Companies Registry to be a \u201cdormant company\u201d. It must still prepare an audit report and other supporting documents, and it cannot make an IRD nil filing when submitting the tax return to the Inland Revenue Department.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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    Nil Filing Policy: New tax return arrangements starting from 2023<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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    According to paragraph 36 of the Tax Representative Circular issued by the Hong Kong Inland Revenue Department on April 1, 2023, all corporations\u2014except those that are dormant under the Companies Ordinance (Cap. 622)\u2014must submit audited financial statements together with their tax returns.<\/p>

    Accordingly, the IRD also, starting from the<\/strong>2022\/23<\/strong>financial year, no longer accepts Profits Tax Returns submitted by non-\u201cdormant companies\u201d in the form of a nil return.<\/strong><\/p>

    Source: Tax Representative Circular<\/a><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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    Requirements for applying to become a \u201cdormant company\u201d<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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    If a company wishes to submit a tax return as a nil return, the primary requirement is that it has become a \u201cdormant company\u201d. To apply to the Companies Registry to be registered as a \u201cdormant company\u201d, the following requirements must be met:<\/p>

    1. It has not purchased or rented any property in Hong Kong, nor authorised others in Hong Kong to use movable property to obtain rent or other income;<\/li>
    2. It has not opened a bank account<\/a>;<\/li>
    3. It has not carried out any form of business activity;<\/li>
    4. It has not employed any staff;<\/li>
    5. It has not authorised others to use any patents, trademarks, or designs.<\/li><\/ol>

      In addition to meeting the above requirements, the company must also pass a special resolution of shareholders before it can apply to the Companies Registry to be registered as a dormant company.<\/p>

      Only after a successful application may the company submit its tax return to the Inland Revenue Department under the name of a \u201cnil return\u201d.<\/p>

      Further reading: How to Convene a Shareholders\u2019 Meeting<\/a> | Directors\u2019 Duties and Responsibilities<\/a><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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      How should a company with no income file taxes?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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      If the company does not meet the requirements for nil filing and has not applied to become a dormant company, the tax filing procedure is the same as for an operating company. The tax filing process for a non-operating company is as follows:<\/p>

      1. Accounting: prepare a profit and loss statement<\/li>
      2. Audit: prepare an audit report<\/li>
      3. Complete the tax return: fill in all fields of the tax return based on the company accounts<\/li>
      4. Submit the tax return: submit the completed Profits Tax Return together with the audit report, tax computation and supporting documents to the Inland Revenue Department<\/li><\/ol>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t
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        In what situations can a company not file a \u201czero return\u201d?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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        The key point is whether the company meets the definition and requirements of a \u201cdormant company\u201d. Even if the Companies Registry record shows the company is in dormant status, if any of the following applies, the company is deemed to require a formal audit and cannot file a \u201czero return\u201d:<\/p>

        1. There are transactions recorded in the company\u2019s bank account (except for payment of the Business Registration Certificate or government prescribed fees);<\/li>
        2. There are import\/export activities or customs declaration records;<\/li>
        3. There are sales or procurement transactions with Hong Kong customers;<\/li>
        4. The company employs full-time or part-time staff in Hong Kong;<\/li>
        5. The company has authorised others to use patents, trademarks, or other intellectual property;<\/li>
        6. The company receives rent in Hong Kong or sells products on consignment;<\/li>
        7. The company participates in operating activities such as trade fairs, online promotion, etc.;<\/li>
        8. Any other profits from Hong Kong or sourced from Hong Kong;<\/li>
        9. There are intercompany fund movements within a corporate group.<\/li><\/ol>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t
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          Frequently Asked Questions<\/h2>\t\t\t\t<\/div>\n\t\t\t\t
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          What is \u201cnil filing\u201d? Can a company with no income file a nil return directly?<\/h3>\r\n\t\t\t\t\t\t\t\t<\/div>\r\n\t\t\t\t\t\t\t\t
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          Nil filing<\/span><\/strong> means entering \u201c0\u201d in all fields on the Profits Tax Return (BIR52) and not submitting an audit report.<\/span>
          The answer is: No.<\/span><\/strong>
          This is a common misconception. Under the new arrangements implemented by the IRD from <\/span>April 1, 2023<\/span><\/strong>, unless the company has formally applied to the Companies Registry and become a <\/span>\u201cdormant company\u201d<\/span><\/strong>, it<\/span>cannot<\/span><\/strong>file a nil return directly, even if it has no operations or income, and must submit audited financial statements.<\/span><\/p><\/span>\t\t\t\t\t\t\t\t\t<\/span>\r\n\t\t\t\t\t\t\t\t<\/div>\r\n\t\t\t\t\t\t\t<\/div>\r\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t

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          What requirements must be met to apply to become a \u201cdormant company\u201d?<\/h3>\r\n\t\t\t\t\t\t\t\t<\/div>\r\n\t\t\t\t\t\t\t\t
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          If a company wishes to carry out nil filing legally, it must first apply to the Companies Registry to become a \u201cdormant company\u201d. This requires a special resolution of shareholders and strict compliance with all of the following requirements:<\/span><\/div>