HONG KONG, Feb. 24 – As the region slowly recovers from the effects of the financial crisis, some business may still be struggling to manage their cash flow.

Hong Kong’s Inland Revenue Department allows payment of taxes by installment for taxpayers having financial difficulties. Taxpayers will need to submit an installment application to the agency and if approved a surcharge not exceeding 5 percent of the outstanding amount will be imposed.

An additional levy not exceeding 10 percent of the outstanding amount may be charged if the taxpayer fails to pay after six months from the due date.

Taxpayers may apply for the installment scheme by submitting form IR1360 for individuals or sole proprietorships, IR1360A for partnerships and IR1360B for corporations.

Moreover, the application forms must be submitted with a payment proposal, copies of their bank statement in the last 3 months, details of their income and expenditure for the past 3 months, and the latest management accounts, cash flow position and business forecast for businesses.

For professional advice on settling tax issues in Hong Kong email Dezan Shira & Associates at hongkong@dezshira.com.