Tax Clearance Requirements when Leaving Hong Kong

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HONG KONG, Jan. 28 – For employees chargeable to tax and intending to leave Hong Kong for more than a month, the Inland Revenue Department (IRD) requires at least 1 month notification before departure to settle all tax liabilities.

This applies to cases when a taxpayer intends to migrate to another country or to study or work overseas. The employer must also need to temporarily withhold payments of salaries to the employee until the IRD issues a letter of release. Non-compliance with such requirements by the individual or the employer may lead to penalties.

The requirement does not apply to employees who travel frequently for work and will just need to file returns and pay taxes annually.

The employer must also determine if an employee leaving the company intends to leave Hong Kong and the expected date of departure. Companies are advised to compile all documents relevant to the termination of employment in case of inspection by the IRD namely the letter of resignation/dismissal, notice of final payment of remuneration, employment visa issued by the Immigration Department and if applicable an employer’s notification of cancellation of employment visa for foreign employees.

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