Q & A for Internet Business

A:

The BRO does not contain any specific provision in respect of internet businesses. Persons who carry on businesses, whether through a brick-and-mortar presence or the internet, have to comply with the same requirements under the BRO.

A:

A person who carries on trading activities is required to apply for business registration if the activities constitute a business under the BRO and are conducted in Hong Kong. This requirement applies whether the goods traded are brand-new or second-hand.

A:

There is no restriction on the age of applicant for business registration. Under the BRO, if a minor carries on a business (except an exempted business) the minor and his or her trustee (including guardian) are obliged to apply for business registration.

A:

The IRD will first gather details of the relevant activities (procurement of goods, solicitation of buyers, delivery of goods, settlement of sales proceeds, etc.), scale of activities and location at which the activities are carried out. Based on the totality of facts of the case, the IRD will determine whether such activities constitute the carrying on of a business in Hong Kong. If yes, the IRD would advise and assist the business operator to apply for business registration. Failure to comply with the business registration requirement may result in prosecution being brought against the person concerned.

A:

Yes. You are still required to apply for the business registration in respect of your business even if you are eligible to claim for an exemption from payment of business registration fee and levy.

A:

No. The business name used by your business operating through the online trading platform or your online store must be the same as the business name as shown on the business registration certificate. You may register more than one business name for the same business. However, each registered additional business name will be treated as a branch of the business. If you carry on more than one business, you should register each business separately. Each business may have its own business name.

A:

No. The business address for the business registration should be a physical address.

A:

The Inland Revenue Ordinance (“IRO”) provides that every person who carries on a trade, profession or business in Hong Kong and derives profits therefrom which arise in or are derived from Hong Kong has to pay profits tax. Based on the totality of facts of the case, the IRD will determine whether a person is chargeable to profits tax in respect of profits derived from transactions carried on through the internet.

While an application for business registration certificate may not in itself give rise to any profits tax liabilities, a person who carries on an internet business is obliged to comply with the requirements under the IRO, which include the following:

 (a)  Unless a tax return has already been received, a business operator has to write to the Commissioner within 4 months after the end of the basis period for the year of assessment concerned if the business is chargeable to profits tax for that year of assessment.

 (b)  A business operator is required to keep sufficient records, in English or Chinese, of their income and expenditure to enable the assessable profits to be readily ascertained. Business records must be retained for at least 7 years after the completion of the transactions to which they relate.