Discovering an error in your submitted Hong Kong tax return can trigger anxiety, but here’s the good news: the Inland Revenue Department (IRD) provides clear pathways to correct mistakes. Whether you’ve omitted income, overstated deductions, or made simple calculation errors, understanding the correction process can save you from penalties and ensure compliance. This practical guide walks you through every step of fixing eTAX return errors in Hong Kong.

Two Critical Correction Scenarios: Timing is Everything

Your correction approach depends entirely on whether you’ve received your assessment notice. This distinction is crucial because it determines the formality of the process and the specific procedures you must follow.

Scenario 1: Before Receiving Assessment Notice (Ideal Window)

If you spot an error before the IRD issues your assessment notice, you’re in the best position. The correction process is relatively straightforward and less formal at this stage.

For eTAX Users (Individual Tax Portal):

1. Log in to eTAX: Access your Individual Tax Portal (ITP) account
2. Navigate to Correction: Go to “Make a Request / Reply” or “Contact Us” section
3. Select Option: Choose “Return Supplement for the Year of Assessment [year]/[year]”
4. Detail Corrections: Clearly state amendments in “Details of Enquiry” section
5. Attach Documents: Upload supporting files (up to 5 files, 200MB total)
6. Submit: Click “Send” to submit your correction request

For Paper Return Filers:

• Write a formal letter to the IRD detailing corrections needed
• Include full name, tax file number, year of assessment, and contact details
• Provide amended information in tax return format
• Attach relevant supporting documentation
• Mail to: Commissioner of Inland Revenue, P.O. Box 28777, Concorde Road Post Office, Kowloon, Hong Kong

Scenario 2: After Receiving Assessment Notice (Formal Process)

Once you’ve received your notice of assessment, corrections require a formal objection. This is governed by specific provisions of the Inland Revenue Ordinance (IRO) and has strict time limits.

How to Lodge a Formal Objection: Step-by-Step Guide

When correcting errors after assessment, you must file a formal objection. Here are your options and what to include:

Method 1: Online Objection via eTAX (Recommended)

1. Access Account: Log in to your eTAX account
2. Find Objection Section: Navigate to objection section (available for Salaries Tax, Property Tax for solely owned properties, and Profits Tax for sole proprietorships)
3. Complete Form: Fill out the online objection form
4. State Grounds: Clearly and precisely explain the grounds for your objection
5. Upload Evidence: Attach supporting documents as needed
6. Submit: Send your objection electronically

Method 2: Paper Submission Using Form IR831

1. Download Form: Get Form IR831 – Notice of Objection/Application for Revision of Assessment
2. Complete Sections: Fill in all relevant parts
3. State Grounds: Precisely explain why you’re objecting
4. Sign: Sign the completed form
5. Submit: Mail to: Commissioner of Inland Revenue, P.O. Box 28777, Concorde Road Post Office, Kowloon, Hong Kong or fax to: 2877 1232

What Your Objection Must Include

• Personal Details: Full name, tax file number, contact information
• Assessment Details: Year of assessment, assessment reference number, date of assessment
• Grounds for Objection: Clear explanation of what’s incorrect and why
• Correct Information: Accurate figures or information
• Supporting Evidence: All relevant documents (receipts, statements, calculations)
• Recalculation: Show how the tax should be correctly calculated

Section 70A: Your Extended Correction Safety Net

Section 70A of the Inland Revenue Ordinance is a crucial provision for taxpayers who miss the one-month objection deadline. Introduced to overcome potential hardship, it allows corrections even after assessments become “final and conclusive.”

When Section 70A Applies

• You discover errors months or years after assessment became final
• You missed the one-month objection deadline for valid reasons
• New information emerges affecting your assessment
• Arithmetical errors, wrong figures, or omissions occurred

Section 70A Time Limits

The deadline for Section 70A applications is the later of:

• Option A: Within 6 years after the end of the year of assessment to which the correction relates, OR
• Option B: Within 6 months after the date on which the relevant notice of assessment was issued

Understanding Penalties: Section 82A of the IRO

Making an incorrect tax return can trigger significant penalties under Section 82A. Understanding these penalties and how they’re applied is crucial for all taxpayers.

What Triggers Section 82A Penalties?

Section 82A(1)(a) provides that any person who, without reasonable excuse, makes an incorrect return by omitting or understating anything they are required to report shall be liable to additional tax of up to three times (treble) the amount of tax undercharged.

• Omitting income from your return
• Understating income or profits
• Overstating deductions or allowances
• Arithmetical errors resulting in underpayment
• Late filing of returns (yes, even late filing can trigger Section 82A)

The Penalty Assessment Process

1. Written Notice: Commissioner issues notice indicating intention to assess additional tax
2. Particulars of Offence: Notice details the alleged offence
3. Opportunity to Respond: You get at least 21 days to submit written representations and evidence
4. Assessment Decision: Commissioner reviews representations before final decision
5. Right to Appeal: You can appeal to Board of Review within one month of additional tax assessment

Penalty Loading Based on Disclosure

The Power of Voluntary Disclosure: Your Best Defense

One of the most effective ways to minimize penalties is through voluntary disclosure. The IRD actively encourages taxpayers to come forward and disclose errors before discovery through audits or investigations.

Benefits of Voluntary Disclosure

• Significantly Reduced Penalties: Typically receive lowest penalty loading
• Avoid Criminal Prosecution: Genuine disclosures handled administratively
• Demonstrates Good Faith: Shows commitment to compliance
• Faster Resolution: Cases often resolved more quickly
• Reduced Stress: Proactive approach reduces anxiety

How to Make a Voluntary Disclosure

For a disclosure to be considered truly “voluntary,” it should be made:

1. Before IRD Contact: Ideally before any audit or investigation initiation
2. Complete and Accurate: Provide full details of all errors and omissions
3. With Supporting Evidence: Include documentation to substantiate corrections
4. In Writing: Submit formal letter or use eTAX system
5. With Payment Proposal: If applicable, propose reasonable payment plan for tax owing

Record Retention: Your Protection Against Penalties

Maintaining proper records isn’t just a legal requirement—it’s essential for substantiating corrections and protecting yourself during the correction process.

Legal Requirements Under Section 51C IRO

• Every person carrying on business in Hong Kong must keep income/expenditure records
• Records must be retained for not less than 7 years
• Includes current year plus previous six years of assessment
• Failure to comply without reasonable excuse: fine up to HK$100,000

What Records to Keep

• All income documentation (invoices, receipts, bank statements, contracts)
• Expense records and receipts
• Bank statements and financial records
• Employment records (for employers)
• Property records (rental agreements, expenses)
• Investment records (purchase/sale confirmations, dividend statements)
• Previous tax returns and assessments
• Correspondence with the IRD

Common Error Types and Correction Approaches

1. Omitted Income

Example: Forgot to report rental income or freelance earnings.

• Calculate exact amount of omitted income
• Gather supporting documentation (rental agreements, payment records)
• File voluntary disclosure or objection stating omission
• Include recalculated tax liability
• Prepare to pay additional tax plus any penalties

2. Overstated Deductions

Example: Claimed personal expenses as business deductions or double-claimed expenses.

• Identify specific incorrect deductions
• Calculate correct deductible amount
• Provide explanation of error occurrence
• Submit corrected calculations with supporting documents

3. Arithmetical Errors

Example: Calculation mistakes resulting in understated income or overstated deductions.

• Show original incorrect calculation
• Show correct calculation
• Explain nature of arithmetical error
• These often receive more lenient treatment as clearly unintentional

Director Liability: The Koo Ming Kown Case (2022)

An important development concerns company director liability for incorrect tax returns. The Court of Final Appeal ruled in Commissioner of Inland Revenue v Koo Ming Kown (August 2022) that:

• A company, not its directors, is required to furnish a profits tax return
• Directors who sign company tax returns are not personally “making” the return
• Therefore, directors are not personally liable for Section 82A additional tax for incorrect company returns
• This applies even though directors may be required to sign under Section 57(1)

2024/25 Tax Year Filing Reminders

For the 2024/25 year of assessment, the IRD issued approximately 2.66 million tax returns to individuals. Here are the key deadlines:

Making errors on tax returns is more common than many realize, but Hong Kong’s tax system provides clear pathways for correction. The key is prompt action, transparency, and following proper procedures. Whether you’re correcting a simple calculation error or addressing significant omissions, understanding your rights under the Inland Revenue Ordinance empowers you to maintain compliance while minimizing penalties. When in doubt, don’t hesitate to seek professional guidance—it’s an investment in peace of mind and proper compliance.