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Tax settlement

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  1. #21

    Join Date
    Feb 2007
    Location
    Shek Tong Tsui (HK Island)
    Posts
    243

    Are you in HK island side? The Tax office building is right beside the IMMD office in Wanchai. Walking is less than 1 minute. Do both on the same day.

    Quote Originally Posted by sw_star:
    Looks like it will consume a day and I'll keep this task after I settle some task at IMMD .

  2. #22

    Join Date
    Feb 2009
    Posts
    7,437
    Quote Originally Posted by sw_star:
    Do I have to calculate tax on my own to bring cash in advance or have to look for near by ATM to withdraw? I just want to get the release letter in the same day, no time to afford one extra day.

    What's TVC ? I've just 5 working days in my hand to settle tax stuff and MPF.
    If you dont have any estimate on how much tax you need to pay, then as @LifeInHK suggests you can go to an ATM in the area after finding out the amount and take out from ATM, return back to tax office. This is the way to get release letter on same day. You can pay tax other ways, but then will need to return a few days later to get the release letter.

    The TVC is the program to pay extra MPF yourself (more than your employer pays), and then government will give you tax benefit. Normally, you can put $60,000 into TVC every year, government will give you $10,000 per year savings in tax. Then when you are retired old person you can get back the TVC. But since you are leaving Hong Kong, there is a special "trick" that foreigners can do to pay the TVC, save the $10,000 in tax, then get the TVC back (and also regular MPF at same time), then leave Hong Kong. So this is like a free $10,000 gift from government for people that are leaving Hong Kong. But since you only have a few days left and its too much trouble, @LifeInHK is correct, you can ignore it and it will not be a problem. Just you have to pay $10,000 more tax. Its just extra $10,000 you have to pay because you didn't research and prepare this beforehand.

  3. #23

    Join Date
    Dec 2014
    Posts
    127

    HI all, finally time for me to relocate from Hong Kong to immigrate to Canada. I am still not sure if this is my permanent departure from Hong kong as I am moving on an Open work permit and my PR application is still ongoing with long delays due to COVID.

    I wish to know, should i inform the immigration about my permanent departure ? I am a HK citizen with HKSAR.
    In term of Taxes, how do i let them know that I am not in HK and not eleigible for any taxes in the coming years. I have been reading a lot about TVC, but is it advisable if my HK tax is quite low, since myself and my wife both were enrolled in post grad programs in last few years OR the final departure TAX is much more ? Since, i already payed taxes for this year when i submitted my last year taxes a bit late..

    In regards to MPF, does it makes sense to leave the MPF here for now ? i may not return here to work but I am afraid to take the cash out and invest somewhere with even poor performance..


  4. #24

    Join Date
    May 2021
    Posts
    628

    Bit of background info would help, were you a salaried person in HK and when did you quit job? Besides what do you mean by you are HK citizen but your PR application is still ongoing while you are moving to Canada on Open work permit!!!


  5. #25

    Join Date
    Dec 2014
    Posts
    127

    Yeah sure.
    A salaried person, going to quit my job today
    I am a HK citizen, moving to Canada on OWP while my PR application to Canada in progress, which means soon I will be a PR in Canada as well. I am quite confident to settle there, but in future (5-7 years) I would like to keep the option to return back open, if I find better opportunities here.
    I moved to HK as a fresh engineer, did my Masters and recently my Business school i-e so far, never been employed on an expat package, which means my salary and TAX payed are pretty average and wondering if TVC still makes sense.


  6. #26

    Join Date
    May 2021
    Posts
    628

    1) TVC is not an option for you for 2021-22 salary as last date to invest is passed on 31-Mar-22 and for 2022-23 there is really no point investing as your salary is earned only for 2-3 months which would be easily covered by Basic allowance.

    For MPF, no harm in keeping the balance here for the moment if you have plan to come back or at least no point booking loss on your investment, I am assuming it should be down quite a bit considering global market as they are unless you invested in very low risk product.. Also since you are HK citizen, highly likely you will at least visit here once in couple of years so see how it goes there and consider withdrawal probably in your next visit.

    Just curious, how did you apply for canadian PR if you are still on open work permit but working in HK? Did you complete your minimum 1 year work requirement in Canada or is there some other route?

    shri likes this.

  7. #27

    Join Date
    Dec 2014
    Posts
    127

    Thanks a lot for your kind advice.
    So clear on the TVC and MPF.
    May i know how i can let the immigration knows that I am out of HK and won't be paying taxes in coming years ? and if the taxation is different for someone leaving HK permanently ?

    Quote Originally Posted by ndt:
    1) TVC is not an option for you for 2021-22 salary as last date to invest is passed on 31-Mar-22 and for 2022-23 there is really no point investing as your salary is earned only for 2-3 months which would be easily covered by Basic allowance.

    For MPF, no harm in keeping the balance here for the moment if you have plan to come back or at least no point booking loss on your investment, I am assuming it should be down quite a bit considering global market as they are unless you invested in very low risk product.. Also since you are HK citizen, highly likely you will at least visit here once in couple of years so see how it goes there and consider withdrawal probably in your next visit.

  8. #28

    Join Date
    Dec 2014
    Posts
    127
    Quote Originally Posted by ndt:
    Just curious, how did you apply for canadian PR if you are still on open work permit but working in HK? Did you complete your minimum 1 year work requirement in Canada or is there some other route?
    Actually, I started my PR application early last year then got the the PNP (Tech draw) and express entry invite, but due to COVID, processing time is now too long, hence i started my OWP application which got approved much quicker.
    ndt likes this.

  9. #29

    Join Date
    Feb 2009
    Posts
    7,437

    The TVC makes sense if your taxable income is over HK$200k/year. This is because you pay 17% tax over $200k. So you invest $60k TVC, claim a $60k tax deduction, this saves you 17% ($10,200) in taxes. Then withdraw the TVC investment. A free $10.2k departure gift (+/- whatever increase/decrease happens to your TVC in that short time).

    But as @ndt mentions, you should have done this before March 31st, saved $10k in your April 2021-March 2022 taxes. Now when you leave you wiill be doing Apr2022-March2023 taxes, so if you leave now probably you don't have an income over $200k in just the last 3 months. Depends, if you are earning over a million a year then maybe still makes sense.


  10. #30

    Join Date
    May 2021
    Posts
    628
    Quote Originally Posted by Busyguy:
    Thanks a lot for your kind advice.
    So clear on the TVC and MPF.
    May i know how i can let the immigration knows that I am out of HK and won't be paying taxes in coming years ? and if the taxation is different for someone leaving HK permanently ?
    Being HK citizen you dont need to declare anything to immigration, consider it as going on long term assignment to other country.

    For IRD, you have two options 1) Settle your tax before you leave in which case you will have to settle last FY and current FY tax before you leave 2) If you still have ties in HK (Family/Friends), can update their address for receiving tax return (green envelop) or even better register eTax account to receive online tax return form.. Pay your tax for 2021/22 between Oct-22 and Jan-22 as usual and current FY tax next year when your current company files Employer's return in Apr-23.. Why pay tax early when you can pay later!!
    Last edited by ndt; 20-05-2022 at 11:09 AM.

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