Nov. 2013 - Holding over of 2013/14 provisional tax
For taxpayers having financial difficulties due to fall in earnings, other than having the tax paid by instalments or making borrowings, it may also be a solution to have the 2013/14 provisional tax wholly or partly held over.
Holdover applications should be made in writing to the Inland Revenue Department stating the grounds of application. The deadline to apply is:
- 28 days before the due date for payment of the provisional tax; or
- 14 days after the date of issue of the notice for payment of the provisional tax, whichever is later.
Holdover may be allowed on the grounds that the taxpayer’s assessable profits, net chargeable income or net assessable value for the year of assessment 2013/14 are likely to be less than 90% of that for the year 2012/13 or the estimated amount on which the provisional tax is calculated. For profits tax cases, taxpayers are required to submit properly signed draft accounts covering not less than 8 months in the year 2013/14 as supporting documents. Other grounds of holdover applications include entitlement to new allowances or cessation to derive profits or income during the year 2013/14.
It is worth noting that even if the first instalment of provisional tax has been settled by its due date, taxpayers may still apply to hold over the second instalment if they have valid grounds to do so.
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