![[Tax clearance before leaving Hong Kong] When should IR56G be filed? A complete guide to employee tax clearance procedures and what employers need to know](https://www.genacct.com/wp-content/uploads/2024/10/20241028145013.webp)
Tax clearance before leaving Hong Kong is a tax obligation that employees must complete before leaving Hong Kong for an extended period. Whether the employee is emigrating, returning to their home country, going on a working holiday, or studying overseas, tax clearance is a key step before long-term departure—alongside handling assets. This article not only explains the procedures, documents and legal requirements for employees, but also provides a detailed explanation of the employer’s reporting obligations when an employee is leaving Hong Kong, including submitting the IR56G form and its notes to the Inland Revenue Department before the employee departs.
Related articles: Employer’s Tax Return | IR56M
What is the legal basis for tax clearance before leaving Hong Kong? Who needs to handle tax clearance?
Under the Inland Revenue Ordinance, tax clearance before leaving Hong Kong is a legal obligation of taxpayers.
Unless the person is not liable to tax or is an employee who frequently travels on business, anyone with a source of income in Hong Kong—including salaries tax, property tax and profits tax—must, if leaving Hong Kong for one month or more, report their departure for tax clearance to the Inland Revenue Department one month before leaving, so that the IRD can determine whether the person must clear taxes before departure.
If an employer knows that an employee will leave Hong Kong for more than one month after resignation, the employer must also submit the IR56G form to the IRD one month before the employee’s departure, and withhold the employee’s wages as required by law.
Source: Persons about to leave Hong Kong – Tax obligations for employers and employees
When do you file IR56G?
Under the Inland Revenue Ordinance, employers must submit the IR56G form (“Employee who is about to cease employment and leave Hong Kong”) to the Inland Revenue Department one month before the employee’s expected departure, and provide a copy of the IR56G to the employee.
Further reading: Tax clearance requires IR56G! What is the IR56G form? Download link and employer filing guide
Tax clearance before leaving Hong Kong: what employers need to know
After submitting Form IR56G, the employer must withhold the employee’s wages and any other sums payable (if any) until the IRD issues a Letter of Release; or until one month after the submission of Form IR56G, whichever is earlier.
- If the employee completes the tax clearance procedures on time, the employer must release the withheld amounts to the employee immediately upon receipt of the Letter of Release.
- If the employee fails to complete the departure procedures on time, the IRD will issue Form IR113 to the employer, requiring the employer to use the withheld wages to pay the tax payable by the employee.
Source: Leaving Hong Kong – Points to note/procedures for employers and employees
Why must employers withhold an employee’s wages until receiving the Letter of Release?
In the worst-case scenario, the employee may not have fulfilled their tax obligations before leaving Hong Kong, including filing tax returns and paying tax. Therefore, the Inland Revenue Ordinance requires employers to withhold the employee’s wages so that, if necessary, the employer can use the withheld wages to settle the employee’s outstanding tax.
When the IRD issues the Letter of Release (IR607), it indicates that the employee has completed tax clearance before leaving Hong Kong. In principle, only then—after the employee has fulfilled their pre-departure tax obligations—may the employer pay the employee’s final wages.
Employee tax clearance procedures before leaving Hong Kong
- Notify the Inland Revenue Department: At least one month before leaving Hong Kong, notify the IRD in writing or by phone;
- Notify the employer: Inform your employer of your resignation and departure date as early as possible, and remind the employer to file Form IR56G.
Note: This step is very important and will affect the subsequent tax clearance process. - Complete tax clearance at the IRD: Bring all required documents, including a copy of IR56G, the final payroll calculation, and proof of termination of employment. If you need to claim personal deductions and allowances, bring the supporting documents as well.
- Issue the individual tax return: Complete and file the Individual Tax Return (BIR60) as soon as possible;
- Check the Notice of Assessment: The IRD generally issues a Notice of Assessment before the taxpayer leaves Hong Kong. If everything is in order, you can pay the tax. You may also lodge an objection, but you must still pay the tax before departure.
- Collect the Letter of Release: If you pay by cash, EPS or cashier’s order, you can collect the Letter of Release immediately at the IRD; if you pay by cheque, you will receive the Letter of Release within 10 days.
- Completion: Provide the Letter of Release to your employer and collect your final wages.
Further reading: Objecting to an assessment | Revising an assessment
Documents for tax clearance before leaving Hong Kong
If you are leaving Hong Kong soon, you may visit the Kai Tak Revenue Tower in person to handle tax clearance immediately. Bringing the following documents can help expedite the process:
- Original Hong Kong Identity Card or passport
- Tax file number
- Proof of termination of employment
- A copy of Form IR56G or a “tax clearance self-declaration” (i.e., the self-declaration for tax clearance)
- Final payroll calculation
- Salary records/proof for the year of assessment
- Supporting documents for deductions/allowances claimed
Do you need tax clearance before leaving Hong Kong if you are unemployed?
Generally, no. If you are not liable to tax, there is basically no need to handle tax clearance.
Note: If you have only recently become unemployed, you still need to handle tax clearance.
Example: You became unemployed in October 2025 but leave Hong Kong in February 2026. The IRD may issue an individual tax return in May 2026. Therefore, you should still complete the tax clearance process before leaving Hong Kong.
What is a tax clearance self-declaration?
Even without IR56G, employees must still complete tax clearance before leaving Hong Kong. However, a “self-declaration” can be used in place of IR56G. The self-declaration should include the following information:
- Tax file number
- Employee’s name and Hong Kong Identity Card number; for non-Hong Kong residents, provide passport number
- Expected date of departure from Hong Kong
- Employer’s name, position and resignation date
- Total income from 1 April of the government fiscal year to the resignation date, including all employee benefits such as rental allowance and transportation allowance
- Applicant’s signature
Consequences of leaving Hong Kong without tax clearance
Under the Inland Revenue Ordinance, both taxpayers and employers must notify the IRD when an employee leaves Hong Kong for an extended period and complete the tax clearance procedures. Failure to comply may result in a Level 3 fine of HK$10,000.
In addition, failure to file a tax return may cause the IRD to issue an estimated assessment. If the estimated amount is higher than the actual tax payable, the taxpayer will need to lodge an objection.
In addition, failure to pay tax under an estimated assessment may result in a fixed penalty, prosecution and court proceedings. In serious cases, the Inland Revenue Department may even freeze a bank account.
Real case sharing: leaving Hong Kong without tax clearance
General Accounting once received a client enquiry after the client noticed an unknown debit in their online banking. After contacting the bank and the Inland Revenue Department, it was found that the issue was unpaid estimated tax. The IRD required the bank to debit the outstanding estimated tax and penalties from the client’s personal account.
Before leaving Hong Kong for an extended period, the client did not notify the employer or complete tax clearance, and did not follow up on any tax return matters during the tax season. The IRD also wrote to the client’s former employer to ask whether wages had been withheld, and requested that the withheld wages be used to pay the former employee’s outstanding tax.
Therefore, General Accounting reminds everyone that leaving Hong Kong long-term is not a reason for failing to file tax returns. On the contrary, if you are leaving for an extended period, you should complete tax clearance before departure to avoid unnecessary penalties and adverse records.
Tax clearance timeline and task checklist for employers and employees
Employees who are about to leave Hong Kong and their employers need to complete the relevant tax clearance procedures. Employers must submit Form IR56G at least one month before the employee leaves Hong Kong and withhold the amounts payable until receiving the “Letter of Release”. Employees must notify the IRD of their departure date, settle all tax payable, and may visit a tax centre in person to expedite the process. If the employee still has taxable income or share awards, they should report to the IRD promptly. For details, please refer to the following timeline and task checklist:
Tax clearance timeline 1: Expected departure is at least 1 month away
Employer tasks
- Submit Form IR56G (keep a copy for the employee)
- Withhold the amounts payable to the employee at the time of submission*
- Remind the employee
Employee tasks
- Notify the Inland Revenue Department of the expected departure date (by phone, email or post)
- Submit the Individual Tax Return (BIR60)
- To speed up the process, visit a tax centre in person
Tax clearance timeline 2: Before the employee leaves Hong Kong
Employer tasks
- Release the amounts payable to the employee after the withholding period has expired
Employee tasks
- Pay the tax
- Collect a copy of the “Letter of Release” (in person or by post)
Tax clearance timeline 3: After completing tax clearance before leaving Hong Kong
Employer tasks
- If additional remuneration is paid to the employee, file Form IR56G again (keep a copy for the employee)
Employee tasks
- If you have additional remuneration, income, dividends, etc., you must still notify the IRD
*The withholding period is one month from the date the IR56G form is issued, or until the “Letter of Release” issued by the IRD is received, whichever is earlier.
Frequently Asked Questions
Q: Do non-Hong Kong permanent residents need to handle tax clearance?
A: Yes. Regardless of nationality, if you are liable to tax in Hong Kong, you must complete tax clearance before leaving Hong Kong.
Q: What is the Letter of Release?
A: The Letter of Release is a document issued by the IRD after the employee has completed the individual tax return and paid the tax, confirming that the employee has completed the tax clearance procedures.
Q: Will there be a tax refund after tax clearance?
A: Yes. If last year’s provisional tax is sufficient to cover this year’s tax, the IRD will later issue a refund cheque.
More details: Salaries tax calculation, personal assessment, deductions and allowances
Q: Does the Notice of Assessment for tax clearance require payment of provisional tax?
A: No. A tax clearance assessment only covers the tax for the year of assessment of the tax return.
More details: How provisional tax is calculated
Conclusion
Tax clearance before leaving Hong Kong is a statutory tax obligation that taxpayers must handle before leaving Hong Kong for an extended period. As long as there is a source of income, such as salaries tax or property tax, the taxpayer must notify the Inland Revenue Department one month before departure so the IRD can determine whether tax clearance is required. If an employer knows an employee will leave Hong Kong for more than one month, the employer must submit Form IR56G one month in advance and withhold the employee’s wages until the employee completes tax clearance and the IRD issues a Letter of Release. The employee must notify the IRD and pay the tax. Failure to complete tax clearance may result in fines, estimated assessments and other legal consequences.
Further reading:
