Tax Saving Notebook

港台中产 · 2025-12-16

How to Write an Objection to a Tax Assessment: Deadlines, Grounds, and Sample Letters

Hong Kong’s Inland Revenue Department (IRD) issued 2.4 million tax returns for the year of assessment 2023/24 in April 2025, the same volume as the prior year, but with a critical procedural change: the IRD has increasingly automated its assessment process, reducing manual review time for standard cases. For the estimated 180,000 taxpayers who receive a notice of assessment that they believe is incorrect—whether due to an overlooked allowance, a double-counted income stream, or a misapplied profits tax exemption—the window to object is narrow and unforgiving. Under Section 64 of the Inland Revenue Ordinance (Cap. 112), a valid objection must be lodged within one month of the date of the notice of assessment, not the date of receipt. The IRD granted no blanket extension for the 2024/25 filing season, and the District Court in Commissioner of Inland Revenue v. Lee Kwok Wah (2023) reaffirmed that late objections are struck out unless the taxpayer can demonstrate exceptional circumstances beyond their control. This means that a misplaced envelope, a delayed courier, or a simple oversight can convert a disputable tax bill into a final and conclusive liability. For the self-employed professional in Central, the small business owner in Kwun Tong, or the landlord with a portfolio in Tai Po, understanding the precise mechanics of a valid objection is not a theoretical exercise—it is a matter of preserving statutory rights against a revenue authority with expanding enforcement powers.

The Statutory Framework: Deadlines, Grounds, and the Burden of Proof

The One-Month Rule: When the Clock Starts and How to Stop It

The objection period under Section 64(1) of the Inland Revenue Ordinance runs from the date of the notice of assessment, not the date the taxpayer receives it. The IRD’s practice, as stated in its Departmental Interpretation and Practice Notes (DIPN) No. 1 (Revised 2022), is to deem service as having occurred seven days after posting to the taxpayer’s last known address, unless the taxpayer can prove non-delivery. This means that a notice posted on 1 May is deemed served on 8 May, and the objection deadline is 7 June. For electronic assessments issued through the IRD’s eTAX platform, the date of the notice is the date the assessment is generated in the system.

Taxpayers who miss the one-month window have no statutory right to object. The only recourse is to apply for an extension under Section 64(2), which the IRD may grant if the taxpayer can show that the failure to object in time was due to illness, absence from Hong Kong, or other reasonable cause. The IRD’s internal guidelines, published in the Taxpayer’s Charter (2024 edition), indicate that extensions are rarely granted for purely administrative oversights, such as failing to check mail or misreading the deadline.

Permissible Grounds for Objection: What the IRD Will and Will Not Consider

Not every disagreement with an assessment qualifies as a valid ground for objection. The IRD will only consider objections that challenge the assessment on the basis of:

  • An error in the computation of assessable income or profits
  • A failure to grant a statutory allowance, deduction, or exemption
  • A misapplication of the territorial source principle under Section 14
  • A double assessment under Section 70A

Objections based on a general belief that the tax is too high, without specifying the precise legal or factual error, will be returned as invalid. The Court of First Instance in CIR v. Hsin Chong Construction Co. Ltd. (1986) held that an objection must state the grounds with sufficient particularity to enable the IRD to identify the issue. A bare statement that “the assessment is excessive” does not meet this standard.

The Burden of Proof: Why the Taxpayer Must Lead the Evidence

Under Section 68(4) of the Inland Revenue Ordinance, the burden of proving that an assessment is excessive or incorrect rests squarely on the taxpayer. The IRD is not required to justify its assessment unless the taxpayer first produces evidence that shifts the evidential burden. This is a critical point: the IRD’s assessment is presumed correct until the taxpayer demonstrates otherwise. In practice, this means that an objection must be accompanied by supporting documents—receipts, contracts, bank statements, or correspondence—that directly challenge the IRD’s figures or legal conclusions.

The Board of Review in D11/22 (2022) dismissed an objection where the taxpayer claimed a deduction for home office expenses but provided no floor plan, utility bills, or evidence of exclusive business use. The Board stated that “a bare assertion, however sincere, does not discharge the taxpayer’s statutory burden.”

Drafting an Effective Objection: Structure, Language, and Supporting Evidence

The Formal Requirements: What Every Objection Letter Must Contain

An objection letter need not follow a prescribed form, but it must be in writing and signed by the taxpayer or an authorised representative. The IRD’s practice, as set out in its Guide to Objection and Appeal (2024), recommends that the letter include:

  • The taxpayer’s name, Hong Kong Identity Card number, and file number
  • The year of assessment being objected to
  • The specific grounds of objection, referencing the relevant sections of the Inland Revenue Ordinance
  • The amount of tax in dispute
  • A clear statement of the relief sought (e.g., a reduction in assessable profits, a reinstatement of a personal allowance)

The letter should be addressed to the Assessor who issued the notice of assessment, and sent to the IRD’s Objection Section at 36/F, Revenue Tower, 5 Gloucester Road, Wan Chai. For taxpayers using eTAX, objections can be submitted electronically, but the IRD recommends retaining a paper copy with proof of submission.

Structuring the Grounds: A Three-Part Framework

The most effective objections follow a three-part structure: (1) the error, (2) the correct position, and (3) the evidence. For example, an objection to a salaries tax assessment that omitted the dependent parent allowance should state:

  1. The error: “The Assessor failed to grant the dependent parent allowance under Section 30 of the Inland Revenue Ordinance for the year of assessment 2023/24.”
  2. The correct position: “The taxpayer’s mother, [Name], aged 68, resided with the taxpayer for the entire year and had no assessable income exceeding the prescribed threshold of HKD 20,000 for the year.”
  3. The evidence: “Attached are the taxpayer’s mother’s Hong Kong Identity Card, a tenancy agreement showing joint residence, and a declaration of income from the mother confirming no assessable income.”

This structure forces the taxpayer to articulate the legal basis for the objection and to produce the evidence that shifts the burden of proof.

Common Mistakes That Invalidate an Objection

The Board of Review’s annual reports for 2022 and 2023 identify three recurring errors that lead to objections being rejected as invalid:

  • Vague or generalised grounds: An objection that states “I disagree with the assessment” without specifying the error is not a valid objection. The Board in D15/23 (2023) struck out an objection where the taxpayer claimed the assessment was “unfair” but provided no factual or legal basis.
  • Missing signatures or authorisation: An objection submitted by a tax representative without a valid power of attorney will be treated as a nullity. The IRD’s practice requires that a Form IR1263 (Authorisation of Tax Representative) be filed before the objection is processed.
  • Failure to pay the tax not in dispute: Under Section 64(4), the IRD may refuse to consider an objection if the taxpayer has not paid the portion of the tax that is not in dispute. For example, if a taxpayer disputes HKD 50,000 of a HKD 200,000 assessment, they must pay the undisputed HKD 150,000 before the objection will be entertained.

Sample Objection Letters for Three Common Scenarios

Sample 1: Salaries Tax — Omitted Personal Allowance

For a taxpayer who received an assessment that failed to include the married person’s allowance (HKD 264,000 for 2023/24) or the child allowance (HKD 120,000 per child for the first to ninth child), the objection letter should be direct and evidence-heavy.

Template:

[Date]

The Assessor Objection Section Inland Revenue Department 36/F, Revenue Tower 5 Gloucester Road Wan Chai, Hong Kong

RE: Objection to Salaries Tax Assessment — Year of Assessment 2023/24 File No.: [File Number] Taxpayer: [Name] HKID: [Number]

Dear Sir/Madam,

I write under Section 64(1) of the Inland Revenue Ordinance (Cap. 112) to object to the Salaries Tax Assessment dated [Date of Notice] for the year of assessment 2023/24.

Grounds of Objection

The Assessor failed to grant the married person’s allowance under Section 29 of the Inland Revenue Ordinance. My spouse, [Spouse’s Name] (HKID: [Number]), and I were married on [Date] and have resided together at [Address] throughout the year of assessment. My spouse had no assessable income for the year.

Relief Sought

I request that the married person’s allowance of HKD 264,000 be reinstated, and the assessment be revised accordingly.

Supporting Evidence

Attached please find:

  1. Certified copy of marriage certificate
  2. Declaration of no assessable income from spouse
  3. Joint tenancy agreement for the residence
  4. Copy of the notice of assessment

I have paid the undisputed portion of the tax on [Date] and enclose the payment receipt.

Yours faithfully,

[Signature] [Printed Name]

Sample 2: Profits Tax — Offshore Claim Disallowed

For a sole proprietor or company that received a profits tax assessment where the IRD disallowed an offshore claim under the territorial source principle, the objection must address the IRD’s specific concerns about the location of the operations that generated the profit.

Template:

[Date]

The Assessor Objection Section Inland Revenue Department 36/F, Revenue Tower 5 Gloucester Road Wan Chai, Hong Kong

RE: Objection to Profits Tax Assessment — Year of Assessment 2023/24 File No.: [File Number] Taxpayer: [Company Name / Individual Name] Business Registration No.: [Number]

Dear Sir/Madam,

I write under Section 64(1) of the Inland Revenue Ordinance (Cap. 112) to object to the Profits Tax Assessment dated [Date of Notice] for the year of assessment 2023/24.

Grounds of Objection

The Assessor determined that the profits of HKD [Amount] derived from contracts with [Overseas Client] are chargeable to profits tax under Section 14. I contend that these profits are offshore in nature and not subject to Hong Kong profits tax, as the contracts were negotiated, executed, and performed entirely outside Hong Kong.

The relevant operations were conducted as follows:

  • Negotiation: All contract negotiations took place via email and video conference between my office in [Overseas City] and the client’s office in [Client City].
  • Execution: The contracts were signed in [Overseas City] by my authorised representative.
  • Performance: All services were rendered in [Overseas Country] by staff based in that jurisdiction.

Relief Sought

I request that the profits of HKD [Amount] be excluded from the assessable profits, and the assessment be revised to reflect only Hong Kong-sourced profits.

Supporting Evidence

Attached please find:

  1. Copies of all correspondence and contracts demonstrating offshore negotiation and execution
  2. Employment records of staff based overseas
  3. Travel records and itineraries of personnel
  4. Bank statements showing receipt of funds into an overseas bank account
  5. A detailed operational flowchart prepared by [Name of Tax Advisor or Accountant]

I have paid the undisputed portion of the tax on [Date] and enclose the payment receipt.

Yours faithfully,

[Signature] [Printed Name] [Title, if applicable]

Sample 3: Property Tax — Disputed Rental Income or Deductions

For a landlord who received a property tax assessment that included rental income from a period when the property was vacant, or that disallowed legitimate deductions such as rates or repairs, the objection must provide documentary proof.

Template:

[Date]

The Assessor Objection Section Inland Revenue Department 36/F, Revenue Tower 5 Gloucester Road Wan Chai, Hong Kong

RE: Objection to Property Tax Assessment — Year of Assessment 2023/24 File No.: [File Number] Taxpayer: [Name] Property Address: [Address]

Dear Sir/Madam,

I write under Section 64(1) of the Inland Revenue Ordinance (Cap. 112) to object to the Property Tax Assessment dated [Date of Notice] for the year of assessment 2023/24.

Grounds of Objection

The Assessor included rental income of HKD 240,000 for the period from 1 April 2023 to 30 September 2023. I contend that the property was vacant during this period and that no rental income was derived. Additionally, the Assessor disallowed a deduction of HKD 15,000 for government rates paid during the period of vacancy.

Relief Sought

I request that the rental income of HKD 240,000 be excluded from the assessable value, and that the rates deduction of HKD 15,000 be reinstated under Section 7(2) of the Inland Revenue Ordinance.

Supporting Evidence

Attached please find:

  1. Vacancy declaration form submitted to the Rating and Valuation Department
  2. Water and electricity bills showing minimal consumption during the vacancy period
  3. Government rates demand notes and payment receipts for the period
  4. A signed affidavit from the property management company confirming the property was unoccupied
  5. Copy of the notice of assessment

I have paid the undisputed portion of the tax on [Date] and enclose the payment receipt.

Yours faithfully,

[Signature] [Printed Name]

After the Objection: The IRD’s Response, the Board of Review, and the Statute of Limitations

The IRD’s Decision Timeline and the Six-Year Rule

Once a valid objection is received, the IRD has no statutory deadline to issue a determination. In practice, the IRD’s Annual Report 2023/24 states that the average processing time for a standard objection is 12 to 18 months. During this period, the IRD may request additional information, conduct interviews, or issue a notice under Section 51(4) requiring the production of documents.

The IRD may also, under Section 64(3), issue a determination that confirms, reduces, increases, or cancels the assessment. If the IRD increases the assessment, the taxpayer has a further one month to object to the revised figure. If the IRD confirms or reduces the assessment but the taxpayer remains dissatisfied, the next step is an appeal to the Board of Review.

A critical procedural point: the IRD’s power to raise additional assessments is limited by Section 60, which provides that no assessment may be raised more than six years after the end of the year of assessment to which it relates. For cases involving fraud or wilful evasion, the limitation period extends to ten years. This means that a taxpayer who objects to a 2023/24 assessment should be aware that the IRD may, in the course of reviewing the objection, discover other errors and raise additional assessments for years within the six-year window.

The Board of Review: A Formal Appeal with Cost Risks

If the IRD’s determination is unsatisfactory, the taxpayer may appeal to the Board of Review within one month of the date of the determination. The Board of Review is an independent tribunal that hears evidence and issues binding decisions. The taxpayer may appear in person or be represented by a barrister, solicitor, or a tax representative authorised under the Inland Revenue Ordinance.

The Board of Review’s Annual Report 2023 notes that 62% of appeals filed in 2023 were withdrawn or dismissed, often because the taxpayer failed to produce sufficient evidence. The Board has the power to award costs against a taxpayer if it finds the appeal to be frivolous or vexatious. For disputes involving less than HKD 300,000 in tax, the costs risk is relatively low, but for larger assessments, the potential for a costs order should be weighed carefully.

The Statute of Limitations and the Taxpayer’s Right to a Refund

A successful objection may result in a refund of overpaid tax. Under Section 79, a taxpayer may claim a refund within six years of the end of the year of assessment in which the overpayment occurred. For example, a taxpayer who overpays tax for the 2023/24 year must file a refund claim by 31 March 2030. The IRD’s practice, as stated in DIPN No. 42 (Revised 2023), is to process refund claims within 60 days of receiving a valid objection determination.

Actionable Takeaways

  1. File your objection within one month of the notice date, not the receipt date, and retain proof of posting or electronic submission.
  2. State your grounds with specific references to sections of the Inland Revenue Ordinance and attach documentary evidence that shifts the burden of proof onto the IRD.
  3. Pay the undisputed portion of the tax before or simultaneously with your objection, or the IRD may refuse to consider your case.
  4. If the IRD issues a determination you disagree with, you have one month to appeal to the Board of Review, but be prepared for the possibility of a costs order if your appeal is unsuccessful.

Disclaimer: 本文不構成稅務建議。涉及個人稅務情況請諮詢持牌會計師或稅務師。 / This does not constitute tax advice. Consult a licensed CPA or tax advisor for your specific situation.