Processing Inland Revenue Reports

This chapter provides an overview of processing Hong Kong Inland Revenue (IR56) reports and discusses how to:

Create Inland Revenue report data.
Review and maintain IR56 report data.
Generate the IR56B electronic file.
Run Inland Revenue reports.

Understanding Hong Kong Inland Revenue Reporting

You must generate several reports to comply with Hong Kong legislative payroll requirements. These reports are statutory and report the following information:

IR56B: Employer's return of remuneration and pensions.
IR56E: Notification by employer of an employee commencing work.
IR56F: Notification by employer of an employee about to cease employment.
IR56G: Notification by employer of an employee about to depart Hong Kong.
IR56M: Notification of remuneration paid to persons other than an employee.

We discuss all aspects of the creation of the data for these Inland Revenue reports. This includes all of the pages that enable, generate, and maintain both employee and company identification and biographical data that support the reporting requirements of the Hong Kong Inland Revenue Department (IRD).

To ensure that you populate all of the available details required for your Inland Revenue reports, it is important that you follow the correct sequence of steps:

Set up report data using the following pages:
- Report Element Setup.
- Departure Details.
- Principal Employer of PT EE.
- Employee Housing Quarters.
- Self Employed Data.
- Overseas Concern Details.
- IR56 Creation Controls HKG.
- Tax Reference Number Details.
- IR56 Exchange Rate Definition.
Generate IR56 report data using the IR56 Creation page.
Review and maintain IR56 report data using the following pages:
- IR56 Personal Details.
- IR56 Job / Quarters Details.
- IR56 Monetary Details.
Generate IR56 reports using the Print pages for each of the reports (IR56B, IR56M, IR56E, IR56F and IR56G).
Generate the IR56B Electronic File using the IR56 Electronic File Creation page.

Note. Inland Revenue reports also use personal data, such as spouse details and national IDs. You can check this information after you run the reports using the IR56 Personal Details page.

Creating Inland Revenue Report Data

This section provides an overview of the Inland Revenue Report data creation process and discusses how to generate the IR56 report data.

Understanding the Inland Revenue Report Data Creation Process

The Inland Revenue Report data creation process generates data for all Inland Revenue reports. The Inland Revenue Department has defined the report layout and the conditions that must be met while generating the IR56 reports. These conditions affect the way in which you generate and store the data in PeopleSoft tables.

The GPHK_IR56_TBL table stores the results of the data generated by the data creation process. This data is used for viewing and generating the IR56B electronic file and hard copy reports.

Note. The IR56 creation program maintains the creation date. During the printing of IR56 documents, if the system identifies a document as a replacement, the system retrieves the date when it created the earlier version and uses that as the submission date.

Viewing Delivered Elements

The PeopleSoft system delivers a query that you can run to view the names of all delivered elements designed for Hong Kong. Instructions for running the query are provided in the PeopleSoft Enterprise Global Payroll 8.9 PeopleBook.

Page Used to Create Inland Revenue Report Data

Page Name	Object Name	Navigation	Usage
IR56 Creation	GPHK_IR56_CREATE	Global Payroll & Absence Mgmt, Year-End Processing, Create IR56 Data HKG, IR56 Creation	Run the process that captures information required for generating IR56 data and reports. After the process is initiated, the system identifies eligible employees and retrieves the information required for reporting.

Generating IR56 Report Data

Access the IR56 Creation page.

Tax Reference Number

Select the tax reference number representing the pay entity (or entities) for which the IR56 must be generated. IR56 reports all run by tax reference number, which has a major impact on the way the system creates and stores IR56 data. For every employee attached to the pay entity (sharing the tax reference number), the system combines amounts for each year to date element by currency code and stores them in the IR56 result tables. After the process is completed, you can use the IR56 Monetary Details page to enter adjustments to reflect the amount that should be reported on the IR56 documents.

Tax Year

Enter the period for which the report must be reported. Hong Kong has set the tax period to be April 1 to March 31. Enter the year with 4 digits (for example, 2000).

Note. Although the tax year is not required for the IR56G and IR56F reports, you must still enter it.

Recreate

When you run the IR56 generation process for the first time, the value of this field does not matter. Data is generated for the selected employees or all eligible employees of the pay entity.

When you initiate the process again with the same parameters, the Recreate check box determines the following:

If you select the check box:

Employees (records in the IR56 table) that belong to the select group are deleted if the document created earlier has not been issued. Manual changes or information entered on the employee record using the IR56 Inquiry component are retained and included in the new record created for the employees.

If employees have been issued the respective document, a new employee record is generated on top of the existing one. The newly created record is identified as a replacement record. Manually entered information in the earlier version is copied into the new record.

If you clear the check box, records are generated for the select group only if they don’t already have a record existing. The record created is identified as an original record.

Note. The select group is the employee list entered on the run control page or the employees that are selected based on the criteria entered on the run control page for a specific pay entity.

Begin Date and End Date

These fields are required for the IR56F, IR56G, and IR56E reports. They enable you to narrow down the criteria of employee for whom the report should be generated. The begin and end dates are the tax period for which the employee received a particular amount.

For an IR56F, employees whose termination dates occur during the specified date range are selected.

For an IR56G, employees whose departure dates from Hong Kong occur during the specified date range are selected.

For an IR56E, employees whose hire dates occur during the specified date range are selected.

Unlike the IR56B and IR56M reports, in which balances for employees must be retrieved as of the end of the year, balances in this case are retrieved as of the period end date. The process identifies the last finalized pay calendar that is closest to the period end date and retrieves the balances for reporting.

Selected Employee List for IR56

EmplID (employee identification)

You can initiate the data creation process for a specific set of employees by selecting one or more employees.

Although you can select an employee ID, the process still decides if an employee is eligible to receive the selected IR56 document. For example, if you are running the process to create IR56B and you select an employee who has been terminated, the process ignores this employee.

Working with Report Types

Report Type	Processing
Annual Return For Employees IR56B	Employees who are active at the end of the tax year are selected for processing. Active employees are identified by their employee status. Values are: A: Active. P: Leave with pay. Q: Retired with pay. U: Terminated with pay. The value is matched with the current row in the JOB record for the employee. Because an employee can have multiple jobs, the status is checked against all of the job records for the employee being processed. An employee is considered active when at least one job record matches the previously mentioned employee status.
Annual Return For Non-Employee IR56M	Non-employees who are active at the end of the tax year are selected for processing. The same processing as IR56B occurs.
Notify Employee Departing HKG IR56G	Employees whose dates of departure from Hong Kong are during the period that you specify are selected for processing. Although this report is more likely for terminated employees, the process does not search for the employee status of the employee. The process ensures that the employee has not been issued an IR56B or IR56F for the same period of employment.
Notifying New Employee IR56E	Employees whose hire dates are during the period that you specify are selected for processing. Although this report is more likely for terminated employees, the process does not search for the employee status of the employee. The process ensures that the employee has not been issued an IR56B or IR56F for the same period of employment.
Notifying Terminating Employee IR56F	Employees who have been terminated during the period are selected for processing. Employees are considered terminated when all the concurrent jobs associated with their EmplIDs have been terminated. The Employee Status field in the JOB record identifies whether an employee is active or inactive. Valid employee status values to identify terminated employees are: A: Active. P: Leave with pay. Q: Retired with pay. U: Terminated with pay. An employee is considered inactive when all the job records match the previously mentioned employee status. The process ensures that the employee has not been issued an IR56B or IR56G for the same period of employment.

Report Type

Processing

Annual Return For Employees

IR56B

Employees who are active at the end of the tax year are selected for processing. Active employees are identified by their employee status. Values are:

A: Active.

P: Leave with pay.

Q: Retired with pay.

U: Terminated with pay.

The value is matched with the current row in the JOB record for the employee. Because an employee can have multiple jobs, the status is checked against all of the job records for the employee being processed. An employee is considered active when at least one job record matches the previously mentioned employee status.

Annual Return For Non-Employee

IR56M

Non-employees who are active at the end of the tax year are selected for processing. The same processing as IR56B occurs.

Notify Employee Departing HKG

IR56G

Employees whose dates of departure from Hong Kong are during the period that you specify are selected for processing. Although this report is more likely for terminated employees, the process does not search for the employee status of the employee. The process ensures that the employee has not been issued an IR56B or IR56F for the same period of employment.

Notifying New Employee

IR56E

Employees whose hire dates are during the period that you specify are selected for processing. Although this report is more likely for terminated employees, the process does not search for the employee status of the employee. The process ensures that the employee has not been issued an IR56B or IR56F for the same period of employment.

Notifying Terminating Employee

IR56F

Employees who have been terminated during the period are selected for processing. Employees are considered terminated when all the concurrent jobs associated with their EmplIDs have been terminated.

The Employee Status field in the JOB record identifies whether an employee is active or inactive. Valid employee status values to identify terminated employees are:

A: Active.

P: Leave with pay.

Q: Retired with pay.

U: Terminated with pay.

An employee is considered inactive when all the job records match the previously mentioned employee status. The process ensures that the employee has not been issued an IR56B or IR56G for the same period of employment.

Note. The employee status is only one of the parameters used to determine whether the employee is eligible to receive an IR56 report. The second parameter is the YTD balance that is maintained by payroll.

Reviewing and Maintaining IR56 Report Data

This section provides an overview of Inland Revenue reporting generated data inquiry pages and discusses how to:

Maintain IR56 personal details.
Maintain IR56 monetary details.

Understanding Inland Revenue Reporting Generated Data Inquiry Pages

After you set up and generate the data required for Inland Revenue reporting and generate those forms, you can review the results and maintain available fields. The IR56 Inquiry component enables you to view and amend the generated IR56 data.

To access the component, enter the specific Inland Revenue report type, tax year, run number, employee ID, or pay entity. The inquiry pages display the information generated for an employee for specific report types. The fields on these inquiry pages contain three types of values:

Values generated from related tables that you cannot modify.
Values that you can enter only on the inquiry page because there is no way of calculating the value.
Values generated by the IR56 data creation process, which you can override by entering an adjustment amount.

The adjustment amount is captured and maintained in a separate field.

Pages Used to Review and Maintain IR56 Report Data

Page Name	Object Name	Navigation	Usage
IR56 Personal Details	GPHK_IR56_INQ1	Global Payroll & Absence Mgmt, Authority Correspondence, Review/Update IR56 Data HKG, IR56 Personal Details	View the IR56 details generated for the employee and review an employee’s personal information including their identification details, spouse details and address history.
IR56 Job/Quarters Details	GPHK_IR56_INQ2	Global Payroll & Absence Mgmt, Authority Correspondence, Review/Update IR56 Data HKG, IR56 Job / Quarters Details	View the IR56 details generated for the employee. This page provides job-related and housing quarter information provided to the employee including country departure and employee residence quarters details. The employee residence quarters details default from the details you set up on the Employee Housing Quarters page. The country departure details default from the details you set up on the Departure Details page.
IR56 Monetary Details	GPHK_IR56_INQ3	Global Payroll & Absence Mgmt, Authority Correspondence, Review/Update IR56 Data HKG, IR56 Monetary Details	View the IR56 details generated for the employee and enter employee monetary and tax details. Specific group boxes for each report type also appear.

Maintaining IR56 Personal Details

Access the IR56 Personal Details page.

Issue Status

Displays the level of the report. The value is Not Issued when the process generates the data, but the printing process has not been completed. When you run the printing process, the value changes to Issued. To stop a particular record from being processed, select On Hold. This status stops both the electronic file process and the printing process from processing the record.

You can also change the status back to Not Issued.

Electronic File Status

If you are creating an IR56B for an employee after you have sent the electronic file to the IRD, there are additional records that weren’t included in the initial file. The new electronic file status is Supplementary. The status of the initial file is Sent.

Employee Identification Detail and Employee Spouse Details

In addition to employee details, statutory reports must report details of the employee’s spouse. The Workforce Administration menu in Human Resources provides the Dependent Information (DEPEND_BENEF) and Depdnt Identification Details (IDENTIFICATN_DEP) components to maintain spouse details.

Name

Displays the employee’s full name details. The Name History page in Workforce Administration enables you to enter employee names in non-English characters. You can enter names in Chinese and English at the same time in separate fields.

PeopleSoft enables you to enter employee names in alternate characters. This feature is available in the Workforce Administration - Personal Details component in Human Resources.

Note. The Chinese name is used in correspondence with the Inland Revenue Board and is used on the employee’s payslip.

National ID

It is necessary to store the employee and spouse Hong Kong Identity Card (IC) numbers or Tax File Numbers. This information is used in correspondence with the Inland Revenue Department. It is also necessary to store the Identity Card numbers of the employee’s dependants.

The details are retrieved from the National ID table (PERS_NID) under Personal Data. The DEP_BENEF_NID table contains different IDs for an employee’s spouse.

Passport Number

Displays the employee or spouse passport number (required for noncitizens). The CITIZEN_PSSPRT table contains passport details of both employees and their dependants.

Address History

Edit Address

To change any of the default address details, click this link to access the Edit Address page

Maintaining IR56 Monetary Details

Access the IR56 Monetary Details page.

Total Amount

IR56 Report Element and Element Name	Display predetermined categories that appear in Inland Revenue reports. Associate payroll accumulators (element names) that must be reported against an IR56 report element instead of rerunning payroll to populate the accumulators. Associate payroll accumulators with IR56 report elements on the Report Element Setup page.
Begin Date and End Date	Display the dates during which the element and accumulator link are effective.
Adjustment Amount, Amount, and Currency	The first instance of the Amount field displays the amount calculated by the data creation process (in HKD) and it initially appears identically in two other locations in the group box. The first field remains the same, regardless of any adjustments (element additions or subtractions) you make. Instead of modifying this generated amount, you enter additional adjustment rows which enable you to add or subtract any additional amounts (in any currency) not calculated during the initial data creation process. You can enter amounts to add or negate a value generated by the process for an accumulator associated with a report element. For example, if you have to subtract 300 USD from the initial amount because the employee has been temporarily employed by a different pay entity, enter – (minus) 300 in the Adjustment Amount field and select USD as the Currency in the new row. The amount in the Amount field at the bottom of the Total Amount group box automatically adjusts by subtracting the equivalent of 300 USD and displaying the new total. Similarly, if you want to add 300 USD, enter 300 in the Adjustment Amount field. The IR56 creation process supports multiple currency processing which impacts the way year to date values are processed and stored in the IR56 result table. In addition to entering manual adjustments, you can enter the currency code in which you are paying the amount. The process calculates the value in local HKD currency and displays the amount reported on the IR56 reports.
Tax Amount paid by Employer	Displays the amount of taxes paid by an employer for an employee. This information is needed for IR56 reporting.

Payments by Overseas Concern

If the employee received an amount from an overseas concern, select the organization that made the payment and enter the amount.

Overseas Concern Identifier	Select the code used to track the overseas concern. Define the overseas concern name and identifier on the Overseas Concern Details page.
Amount Paid and Enter -ve amount for Unknown:	Enter the amount paid by the overseas concern to the employee. If the amount is unknown, enter any negative amount (– 400).

IR56E/F/G/M Specific Details

For each report type that you select, an additional group box appears, enabling you to enter details specific to the report.

Generating the IR56B Electronic File

This section provides an overview of flat file generation and discusses how to create the IR56B electronic file.

Understanding Flat File Generation

PeopleSoft provides the ability to create a flat file that complies with Hong Kong Inland Revenue Department requirements for the submission of electronic files. The output is created by an Application Engine process using a file layout object that has the same structure as that of the electronic file expected by the IRD of Hong Kong.

The employees are selected from the GPHK_IR56_TBL table and records from GPHK_IR56_TBL, GPHK_IR56_QTR, and GPHK_IR56_DTL are retrieved and processed. During the process, personal information, spouse details, and identifications details are also retrieved and the file layout object GPHK_IR56B is populated.

Page Used to Generate the IR56B Electronic File

Page Name	Object Name	Navigation	Usage
IR56 Electronic File Creation	GPHK_IR56_EFILE	Global Payroll & Absence Mgmt, Year-End Processing, Create IR56B Elec File HKG, IR56 Electronic File Creation	Create a flat file that complies with Hong Kong Inland Revenue Department requirements for the submission of electronic files.

Creating the IR56B Electronic File

Access the IR56 Electronic File Creation page.

Tax Reference Number

IR56 reports run by tax reference number, which has a major impact on the way the system creates and stores IR56 data. For every employee attached to the pay entity (sharing the tax reference number), the system combines amounts for each year to date element by currency code and stores them in the IR56 result tables. After the process is completed, you can use the IR56 Monetary Details page to enter adjustments to reflect the amount that should be reported on the IR56 documents.

Tax Year

Displays the period for which the report must be created. Hong Kong has set the tax period to be April 1 to March 31.

Note. Although the tax year is not required for the IR56G and IR56F reports, you must still enter it.

Test Run

Select this check box to create (but not send) the electronic file, so that you can view and check your data. When selected, employee records are not marked as sent and the supplementary status is not applicable.

Running Inland Revenue Reports

There are several statutory reports that you must generate to comply with Hong Kong legislative payroll requirements. The data creation process must be run before running these reports.

The IR56B is an annual report generated for tax declaration purposes. A summary of the earnings and deductions for each employee is reported in a predetermined format. The information is also generated in a predetermined electronic file format and submitted electronically.
The IR56M is a report of candidates, other than employees, who received remuneration at a period in time (for a given tax year) and are about to cease employment in a given period of time.
The IR56G is a report on employees who are about to depart from Hong Kong. All tax liabilities are to be settled before the employee’s departure.
The IR56F is a report of employees who are about to cease employment in a given period of time. You are not required to submit the report if a terminated employee is about to depart Hong Kong. Instead, you should submit an IR56G report.
The IR56E is a report that lists employees who have joined the organization in a given period of time. It must be sent within three months from the date of commencement of employment.

Note. As companies are split into multiple pay entities, the reports display the company name and not the pay entity name. For example, the company name could be Brentworth Holdings and incorporate the following pay entities—Brentworth Holdings Aeronauticals Ltd., Brentworth Holdings Catering Ltd., and Brentworth Holdings Aviation Services. The IR56 report displays Brentworth Holdings as the reporting name.

Pages used to Print Inland Revenue Reports

Page Name	Object Name	Navigation	Usage
IR56B Report	GPHK_IR56B_RUNCTL	Global Payroll & Absence Mgmt, Year-End Processing, IR56B Report HKG, IR56B Report	Generate the IR56B (GPHK0001) — Employer’s Return of Remuneration and Pensions report.
IR56M Report	GPHK_IR5M_RUNCTL	Global Payroll & Absence Mgmt, Year-End Processing, IR56M Report HKG, IR56M Report	Generate the IR56M (GPHK0002) — Notification of remuneration paid to persons other than an employee report.
IR56E Report	GPHK_IR56E_RUNCTL	Global Payroll & Absence Mgmt, Authority Correspondence, IR56E Report HKG, IR56E Report	Generate the IR56G (GPHK0003) — Notification by Employer of an Employee about to Depart Hong Kong report.
IR56F Report	GPHK_IR56FG_RUNCTL	Global Payroll & Absence Mgmt, Authority Correspondence, IR56F Report HKG, IR56F Report	Generate the IR56F (GPHK0004) — Notification by Employer of an Employee about to cease employment report.
IR56G Report	GPHK_IR56FG_RUNCTL	Global Payroll & Absence Mgmt, Authority Correspondence, IR56G Report HKG, IR56G Report	Generate the IR56E (GPHK0005) — Notification by Employer of an Employee commencing work report.

Tax Reference Number	Select the tax reference number representing the pay entity (or entities) for which the IR56 must be generated. IR56 reports all run by tax reference number, which has a major impact on the way the system creates and stores IR56 data. For every employee attached to the pay entity (sharing the tax reference number), the system combines amounts for each year to date element by currency code and stores them in the IR56 result tables. After the process is completed, you can use the IR56 Monetary Details page to enter adjustments to reflect the amount that should be reported on the IR56 documents.
Tax Year	Enter the period for which the report must be reported. Hong Kong has set the tax period to be April 1 to March 31. Enter the year with 4 digits (for example, 2000). Note. Although the tax year is not required for the IR56G and IR56F reports, you must still enter it.
Recreate	When you run the IR56 generation process for the first time, the value of this field does not matter. Data is generated for the selected employees or all eligible employees of the pay entity. When you initiate the process again with the same parameters, the Recreate check box determines the following: If you select the check box: Employees (records in the IR56 table) that belong to the select group are deleted if the document created earlier has not been issued. Manual changes or information entered on the employee record using the IR56 Inquiry component are retained and included in the new record created for the employees. If employees have been issued the respective document, a new employee record is generated on top of the existing one. The newly created record is identified as a replacement record. Manually entered information in the earlier version is copied into the new record. If you clear the check box, records are generated for the select group only if they don’t already have a record existing. The record created is identified as an original record. Note. The select group is the employee list entered on the run control page or the employees that are selected based on the criteria entered on the run control page for a specific pay entity.
Begin Date and End Date	These fields are required for the IR56F, IR56G, and IR56E reports. They enable you to narrow down the criteria of employee for whom the report should be generated. The begin and end dates are the tax period for which the employee received a particular amount. For an IR56F, employees whose termination dates occur during the specified date range are selected. For an IR56G, employees whose departure dates from Hong Kong occur during the specified date range are selected. For an IR56E, employees whose hire dates occur during the specified date range are selected. Unlike the IR56B and IR56M reports, in which balances for employees must be retrieved as of the end of the year, balances in this case are retrieved as of the period end date. The process identifies the last finalized pay calendar that is closest to the period end date and retrieves the balances for reporting.