What Is a Tax Demand Note and How Should It Be Handled?

A Tax Demand Note is a formal tax assessment issued by the Hong Kong Inland Revenue Department (IRD) after a tax return has been filed or assessed.

It sets out:

• The final tax payable and any provisional tax.
• The basis of assessment and tax computation.
• The total amount due, usually split into first and second instalments.
• Payment deadlines and standard assessor’s notes.

Once issued, the amount stated is legally payable based on the taxpayer’s assessable profits.

If you disagree with the assessment, you must lodge an objection within one month from the issue date. For estimated assessments, the objection must be submitted together with the outstanding tax return, otherwise it will not be treated as valid.

Failure to pay on time will result in:

• An initial surcharge of 5% on the unpaid amount.
• A further surcharge of 10% if the balance remains unpaid after six months.