Leaving Hong Kong is never easy; the vibrant city, its picturesque hikes, delectable cuisine, and warm-hearted people always linger as fond memories. Yet, circumstances often lead us on new journeys, bidding farewell to this captivating destination.
If the time has come for you to embark on a new chapter beyond Hong Kong's borders, this article is your compass, guiding you through the necessary steps to ensure a smooth departure and proper closure to your memorable adventure here.
How do I do my Tax Clearance?
The process begins with you notifying your employer about your departure date as soon as it's confirmed. This allows your employer to initiate the necessary procedures.
Your employer should inform the Inland Revenue Department (IRD) of your departure by submitting the Notification of Employee's Departure form (IR56G). This form reports the particulars of your departure along with the details of income received from the beginning of the fiscal year (1st April) until your last employment day. The employer must provide you with a copy of the form; failure to do so could result in financial penalties.
Once the income details have been disclosed to the Inland Revenue Department, you have two options:
- Wait until the IRD sends you the last BIR60 for your personal declaration.
- Go to the IRD with a copy of your IR56G and proceed with the tax clearance in person.
In both cases, your employer is entitled of withholding all payment of money or money’s worth for a period of one month from the date on which the IR56G was given. The employer will release your last payment only after receiving the letter of release, confirming that your position with the Inland Revenue Department has been properly cleared (you have paid all the outstanding taxes).
How do you withdraw your MPF?
An aspect you may consider when leaving Hong Kong is withdrawing your Mandatory Provident Fund (MPF) contributions.
The MPF is a percentage of your monthly income that the employer deducts to put into your pension fund.
The list of necessary documents for applying for an early withdrawal may vary according to the pension holder, but they all require proof of your departure from Hong Kong, along with your new address and bank account details. Additionally, you need to make a declaration confirming your move, which can be organized at the Home Affairs Department.
Shall you close your bank account?
This is a personal choice but non-residents are allowed to have bank accounts in Hong Kong. An important aspect is to remember to cancel direct debits and any e-banking facility which may be running, and to updated your particulars with the new address.
Can you transfer your Insurance when leaving Hong Kong?
Insurance policies are typically non-transferable, so it's important to remember to cancel any existing insurance policies before departing from Hong Kong to prevent overpaying on premiums.
Keep in mind that certain insurance providers may require a written notice period of three months for contract cancellation. This should be considered when making preparations to leave Hong Kong.
Conclusion
Leaving Hong Kong involves crucial tax clearance procedures that require cooperation between employers and employees. By following the necessary steps, including notifying the IRD, settling outstanding tax, and submitting the required forms, both employers and employees can ensure compliance with tax regulations and facilitate a smooth departure from Hong Kong.
If you have any questions or specific circumstances, please contact us.