Tax clearance
According to the Hong Kong tax laws, an individual taxpayer who intends to depart from Hong Kong for good is obliged to notify the Hong Kong Inland Revenue Department (“IRD”) of his/her departure not later than 1 month before the expected date of departure as well as to clear all the tax issues with the IRD before departure.
The employer also has the obligation to report to the IRD of its employee’s departure not later than 1 month before the expected date of departure. It is suggested the employee to follow up with his/her employer closely regarding the tax reporting obligations in order not to bring any delay on his/her tax clearance procedures.
Withdrawal from the Mandatory Provident Fund (“MPF”) Scheme
In case one would like to withdraw the funds maintained in the MPF scheme due to his/her permanent departure from Hong Kong, he/she is required to inform his/her MPF service provider and declare that he/she has departed or will depart from Hong Kong to reside elsewhere with no intention of returning for employment or resettlement in Hong Kong.
Tax planning
It is recommended to understand the tax implications/obligations that one may have at the destination jurisdiction. In particular, one needs to consider the following:
- what is the tax system in the destination jurisdiction, such as whether one will be subject to worldwide income tax?
- what are the tax reporting/filing obligations in the destination jurisdiction?
- what are the potential tax liabilities and whether there is any entitlement to double tax relief/tax credit can be entitled to by applying the relevant double tax treaties?
- whether one can achieve tax efficiency by having certain structure(s)/arrangement(s) in places?
We can assist you with a seamless departure from Hong Kong and help you understand/plan your tax issues in the destination jurisdiction. You may visit our website www.hkwj-taxlaw.hk or contact us on + 852 2804 0889 for more details.