Is your business ready for Hong Kong’s biggest tax compliance transformation in decades? The Inland Revenue Department (IRD) is revolutionizing tax administration with mandatory electronic filing that will affect every business in Hong Kong by 2030. This digital shift isn’t just about convenience—it’s a fundamental change in how businesses interact with tax authorities, driven by global standards and sophisticated data analytics. Whether you’re a multinational corporation or a local SME, understanding this transition is critical to avoiding penalties and staying compliant in Hong Kong’s evolving tax landscape.

Understanding the Three-Phase Implementation Timeline

The IRD has structured the rollout of mandatory e-filing across three distinct phases, each targeting different categories of taxpayers. This gradual approach allows businesses adequate time to prepare while ensuring the tax authority can manage the transition effectively.

Phase 1: In-Scope MNE Groups (2025/26)

The initial phase of mandatory e-filing targets multinational enterprise groups subject to the BEPS Pillar Two top-up tax requirements. According to IRD Commissioner Benjamin Chan, “The initial phase of mandatory e-filing will be implemented for the 2025/26 profits tax returns, targeting in-scope MNE groups subject to top-up tax requirements.”

All Hong Kong entities—including dormant and inactive entities—of in-scope MNE groups that have a Profits Tax filing obligation must e-file their Profits Tax returns for Year of Assessment 2025/26 and subsequent years, regardless of where the ultimate parent entity (UPE) is located.

Phase 2: High-Turnover Businesses (2028)

The second phase will expand mandatory e-filing to businesses with turnover above a specified threshold. While the IRD has confirmed 2028 as the target year, the exact revenue threshold has not yet been finalized. This phase is expected to capture medium to large-sized local enterprises that do not fall within the MNE group criteria.

Phase 3: Universal Coverage (2030)

By 2030, the IRD aims to achieve full-scale mandatory electronic filing of Profits Tax returns for all businesses. This represents the culmination of Hong Kong’s digital transformation journey, bringing all taxpayers—regardless of size or turnover—into the electronic filing ecosystem.

The New eTAX Portal Ecosystem

Supporting the mandatory e-filing initiative, the IRD officially launched three interconnected tax portals on July 22, 2025, following a pre-launch registration period that began on April 22, 2025. These portals represent a complete reimagining of Hong Kong’s tax administration infrastructure.

Business Tax Portal (BTP)

The BTP is the primary platform for businesses to handle tax matters and compliance obligations electronically. It provides a secure, multi-user environment designed to streamline tax management processes for organizations of all sizes.

Key features of the BTP include:

• Electronic filing of Profits Tax returns and supplementary forms
• Instant access to tax and business registration information
• Multi-user access with designated administrators and authorized users
• Application for electronic or certified extracts of business registration information
• Secure interface for managing all business tax affairs

Tax Representative Portal (TRP)

The TRP is designed for tax professionals, accountants, and tax representatives who manage tax affairs on behalf of clients. It enables service agents to efficiently handle multiple client accounts through a single, centralized platform.

Individual Tax Portal (ITP)

While primarily focused on individual taxpayers, the ITP is a prerequisite for BTP access. Business representatives must first establish an ITP account before registering for BTP services.

Registration Process for Business Tax Portal

To access BTP services, businesses must follow a structured registration process:

1. Establish Individual Tax Portal Account: The Responsible Person must first create an ITP account with unique credentials
2. Open BTP Business Account: The Responsible Person opens a BTP Business Account for the organization
3. Designate BTP Administrators: Appoint individuals to manage the BTP Business Account
4. Appoint Authorized Users: BTP Administrators can designate additional authorized users to handle specific tax matters

Understanding iXBRL Filing Requirements

A critical component of Hong Kong’s mandatory e-filing framework is the adoption of Inline eXtensible Business Reporting Language (iXBRL) for tax computations and financial statements. This international standard enables machine-readable data submission while maintaining human-readable presentation.

What Must Be Filed in iXBRL Format?

IRD Tools and Resources

To facilitate iXBRL adoption, the IRD provides comprehensive tools and support resources, which were enhanced on April 1, 2025:

1. IRD Taxonomy Package: The standardized framework defining the data elements and structure for iXBRL filing. Available in both English and Traditional Chinese versions.

2. IRD iXBRL Data Preparation Tools: Free software tools to help taxpayers create compliant iXBRL files:

• Specified iXBRL Templates Input Tool: Designed for small businesses with simpler reporting needs. Uses pre-defined templates with default tags for easy data entry
• iXBRL Comprehensive Tagging Tool: For businesses with more complex tagging requirements. The 2025 enhancement includes upgraded English Windows Tagging Tool that accepts Microsoft Excel format imports

3. Technical Support: The IRD offers dedicated support for iXBRL-related enquiries:

• Email: [email protected]
• Phone: Available through the IRD’s e-Appointment system for scheduled consultations

The Pillar Two Connection: Global Minimum Tax Compliance

The mandatory e-filing requirement for Phase 1 taxpayers is intrinsically linked to Hong Kong’s implementation of the OECD BEPS Pillar Two framework—the global minimum tax regime requiring MNE groups to pay at least 15% effective tax rate in each jurisdiction where they operate.

Pillar Two Portal Launch Schedule

Critical Deadlines for Calendar Year In-Scope Taxpayers

• November 2025: Deadline to reply to IRD letter declaring in-scope status and applying for group/JV codes
• June 30, 2026: Deadline to file top-up tax notification
• June 30, 2027: Deadline to file top-up tax return for the first transition year

Voluntary e-Filing Benefits and Incentives

While certain taxpayers will face mandatory e-filing requirements, the IRD encourages all businesses to adopt electronic filing voluntarily through various incentives and benefits.

Automatic One-Month Extension

One of the most significant benefits of voluntary e-filing is an automatic one-month deadline extension without requiring separate application:

Additional Voluntary e-Filing Advantages

• Environmental benefits: Reduced paper consumption and carbon footprint
• Convenience: File anytime, anywhere with internet access
• Instant confirmation: Immediate acknowledgment of submission
• Reduced errors: Built-in validation checks minimize common filing mistakes
• Secure storage: Digital records accessible through your tax portal account
• Future-proofing: Early adoption provides experience before mandatory deadlines

Record Retention Requirements: The 7-Year Rule

Regardless of whether you file electronically or on paper, Hong Kong law requires businesses to maintain comprehensive records of all transactions and supporting documentation.

Statutory Requirements

Under the Inland Revenue Ordinance (IRO), business records must be retained for a minimum period of 7 years after the completion of the transactions to which they relate. This requirement applies to all businesses, regardless of size, turnover, or industry.

Types of Records to Maintain

Financial Statements and Reports:

• Income statements (Profit and Loss accounts)
• Cash flow statements
• Balance sheets showing assets and liabilities
• Tax computations and working papers

Transaction Records:

• Daily transaction records of all money received or paid
• Sales receipts and invoices
• Purchase records and supplier invoices
• Expense vouchers and supporting documentation
• Bank statements and reconciliations

Preparing Your Business for Mandatory e-Filing: An 8-Step Action Plan

Successful transition to mandatory e-filing requires careful planning and systematic preparation. Follow this comprehensive action plan to ensure your organization is ready:

Step 1: Determine Your Timeline

• Calculate your group’s consolidated revenue for the past four years to determine if you meet the €750 million threshold for Phase 1
• If your group is in-scope, determine your accounting year-end code (D, M, or N) to establish the exact year mandatory filing begins
• Monitor IRD announcements regarding Phase 2 turnover thresholds if you’re a high-revenue local business
• Plan for 2030 if you’re a smaller business not captured in earlier phases

Step 2: Register for Business Tax Portal

• Identify the Responsible Person who will oversee BTP registration
• Ensure the Responsible Person creates an Individual Tax Portal account first
• Open a BTP Business Account through the ITP
• Designate BTP Administrators to manage the account
• Appoint necessary Authorized Users based on your organization’s structure
• Set up distinct usernames and passwords different from ITP credentials

Step 3: Assess Your Current Accounting Systems

• Review your accounting software’s capability to export data in formats compatible with IRD tools
• Determine if your software vendor offers direct iXBRL export functionality
• If using Excel-based systems, verify compatibility with the IRD’s iXBRL Comprehensive Tagging Tool
• Identify any gaps between your current data structure and IRD Taxonomy requirements
• Consider whether system upgrades or replacements are necessary

Step 4: Download and Test IRD Tools

• Download the latest version of the IRD Taxonomy Package from the IRD website
• Install the appropriate iXBRL Data Preparation Tool (Templates Tool for simple needs, Comprehensive Tool for complex requirements)
• Conduct test runs using prior year financial data to understand the tagging process
• Identify common challenges or questions that arise during test preparation
• Utilize the IRD’s e-Appointment system to schedule consultations for technical assistance

Step 5: Train Your Finance and Tax Teams

• Designate iXBRL champions within your finance team to develop expertise
• Arrange training sessions on the BTP interface and navigation
• Provide hands-on practice with iXBRL tools using realistic scenarios
• Consider engaging external tax professionals or consultants with iXBRL experience
• Develop internal documentation and standard operating procedures for e-filing processes
• Ensure backup personnel are trained in case primary filers are unavailable during filing periods

Step 6: Review and Organize Your Records

• Audit your current record retention practices against the 7-year requirement
• Implement systematic filing systems (electronic or hybrid) for easy retrieval
• Establish clear procedures for capturing and storing supporting documentation
• Ensure all transaction records include required details (product descriptions, quantities, parties, pricing)
• Digitize paper records to create accessible electronic archives
• Implement regular backup procedures for electronic records

Step 7: Engage Your Tax Advisors Early

• Discuss your mandatory e-filing timeline and obligations with your tax advisors
• Understand their capabilities and readiness for iXBRL filing
• Clarify responsibility allocation between internal teams and external advisors
• Ensure your advisors have registered for the Tax Representative Portal if they’ll file on your behalf
• Establish clear communication protocols and deadlines for information exchange
• Consider engaging advisors with Pillar Two expertise if you’re a Phase 1 taxpayer

Step 8: Develop a Compliance Calendar

• Mark mandatory e-filing commencement dates based on your phase
• Include Pillar Two notification and return filing deadlines if applicable
• Schedule regular system and process review checkpoints
• Build in buffer time for unexpected technical challenges
• Coordinate e-filing deadlines with your annual audit and financial reporting schedule
• Set internal deadlines earlier than IRD deadlines to allow for issue resolution