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Written by: Zhuo Boan
2021-06-16 20:40
Last update date: 2021-06-16 20:40
Business registration is required for online buying and selling of goods?
A Hong Kong mother recently posted a post on the discussion board, saying that her 12-year-old daughter suddenly received a letter from the Inland Revenue Department, stating that she had to pay a total of 8,250 yuan in business registration fees for the trading account on Carousell in the past three years.
The mother in Hong Kong thought the letter was a scam at first, but later confirmed that the letter from the tax bureau was true. She thought the incident was unreasonable, because her daughter had only a dozen settlements on the platform, and business registration for her account should not be required.
In an interview with "Hong Kong 01", Barrister Lu Weixiong said that whether citizens need to apply for business registration depends on four factors, including whether the behavior has the intention of operating a business, whether the goal is to obtain profit, whether the behavior is continuous, and whether the behavior has been How long does it last.
He also pointed out that if the victim does not agree with the tax bureau, he will need to provide evidence and provide an explanation.
The mother in Hong Kong issued a document saying that her 12-year-old daughter was buying and selling items on the online auction platform Carousell, and therefore received a letter from the tax bureau requesting her to register for business.
(Screenshot of Carousell website)
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The Hong Kong mother posted on the parent-child kingdom discussion area that her daughter born in 2009 had recently received letters and emails from the Inland Revenue Department, stating that she needed to pay the business registration fees for the past 3 years for her account on the online auction platform "Carousell" , The annual cost is 2,750 yuan, which is a total of 8,250 yuan.
The mother in Hong Kong said she had contacted Carousell, but the other party responded that she needed to contact the tax bureau.
The mother in Hong Kong also mentioned that her daughter’s account was opened in 2019. The account was used to buy and sell second-hand items. “In the past few years, there were more than a dozen transactions, mainly for buying and selling, but not enough for 10.” The daughter opened the account to buy cartoons The cards and stones of Starlight Paradise are currently used to sell figurines, novels, stationery and comics. The goods are in new or second-hand condition.
The mother in Hong Kong once suspected that the other party was a phishing scam, but after calling the Inland Revenue Department, the letter was indeed true. The two staff names in the letter also existed, and she was invited to the Inland Revenue Department for business registration.
The mother in Hong Kong said that at one time she thought the letter was a fraud, but later confirmed that the letter was true.
(Picture of Parent-child Kingdom Discussion Area)
The mother in Hong Kong was puzzled as to why the tax bureau knew the address of her daughter. It is estimated that it was because her daughter was young and she was only allowed to deliver it by mail. In a disguised manner, the address was made public.
She also learned on the phone why the Inland Revenue Department knew her daughter's address, but the Inland Revenue Department only said that "it has someone to check."
The mother in Hong Kong has already sent the relevant forms to the tax bureau, and will go to the tax bureau to deal with it when it is convenient for her.
Barrister Lu Weixiong stated that whether business registration is required for trading activities depends on four factors.
(Profile picture)
The reporter of "Hong Kong 01" asked Barrister Lu Weixiong about the incident. He stated that whether business registration is required for trading activities depends on four factors. The first is whether there is an intention to operate the business; the second is whether there is any profit. It must be considered at the same time.
If both of the above are established, it depends on whether the behavior is persistent or a single action, because a business going concern is not just a single transaction, and finally it is how long the behavior lasts.
He pointed out that if the above four factors are met, even if the parties do not think they are doing business, the tax bureau has already regarded them as doing business.
Barrister Lu Weixiong also mentioned that whether an item is brand new or second-hand does not affect whether it needs to be registered for business, and age is not the only consideration.
He cites many people who buy brand-new items and find it unsuitable to transfer them at a cheaper price. This situation does not meet one of the four factors for profit, so business registration is not required, and "your house will not sell out." Is there another one? It's all a single event, and it doesn't look like a business model."
Finally, Barrister Lu Weixiong said that if the client does not agree with the tax bureau, he needs to submit evidence to the bureau to prove that he does not meet the criteria for business registration. It is commonly known as "counting". During the process, "anything you find useful I'll look at you."
He also gave an example that even if it is a property sale, if the transaction is regarded as speculation by the tax bureau, it may be required to pay taxes. Moreover, property speculation can be carried out without business registration and company registration. The key point is whether the behavior has a commercial nature or not. Similar to that the victim is required to do business registration.
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