According to Hong Kong Inland Revenue Department (IRD) annual reports, there were 69 tax prosecution cases arising from tax evasion cases by the IRD field audit and investigation unit during 2000-01 to 2021-22. This study investigates these 69 prosecutions cases and finds that 1) the majority (80 percent) of the offenders were individual taxpayers rather than corporate taxpayers; 2) the top three reasons for offenses include a) false claims for deductions/allowances; b) omission of rental income, and c) profits tax evasion. In terms of penalties, the average fine was around HK$553,576 excluding two extreme cases of HK$11million and HK$8.316 million, and the average length of imprisonment was 4.8 months. A Hong Dollar is worth about 12.8 cents of a U.S. dollar.

This study further examines what were the IRD's considerations to prosecute those tax evasion cases based on previous court cases, IRD Departmental Interpretation, and Practice Notes No.11 Field Audit and Investigation. To conclude, this study provides insights on the current practices of Hong Kong IRD tax system and the prosecution of tax evasions.