Under the Inland Revenue Ordinance, every business must keep sufficient records, in English or Chinese, for its assessable profits to be readily worked out. Records must be kept for at least 7 years from the transaction date. Not keeping adequate records is an offence, with a fine of up to HK$100,000.
What you must keep
- Books of account recording receipts and payments, or income and expenditure.
- The underlying documents that verify those entries, such as vouchers, bank statements, invoices and receipts.
- A record of the business's assets and liabilities.
- Payroll records for your employees, also kept for at least 7 years.
How long
At least 7 years after the date of the transactions. The obligation continues after you stop trading, until the 7 years have passed. If losses from earlier years are set off against later profits, the IRD suggests keeping the records until 7 years after the end of the year in which the losses are fully used.
Practical tips from the IRD guide
- Make bookkeeping a regular routine and keep it up to date.
- Keep your books organised so records are easy to find.
- Don't leave things to the last minute before the tax return is due.
Related service: Accounting & Bookkeeping (From HK$1,000 / year). We can handle this for you, and the first consultation is free.
Frequently asked questions
How long must I keep business records in Hong Kong?
At least 7 years from the date of the transaction, even after the business stops trading.
Can my records be in Chinese?
Yes. The Inland Revenue Ordinance requires records in English or Chinese.
What is the penalty for not keeping records?
Not keeping adequate records is an offence, with a fine of up to HK$100,000.
Sources (official)
- IRD: A Guide to Keeping Business Records (PAM 51C)
- IRD: What tax obligations do I have as an employer?
This guide is general information, not professional advice. Government fees and deadlines can change, so check the official sources linked above.