Taxation of bonus received after leaving HK

[Panda143]

My employer is planning to relocate me overseas in October 2024 and accordingly i understand they will file an IR56G in October to inform the IRD about my departure and I will be asked to clear my taxes before I leave.

Now, my employer usually makes bonus payments in April/May every year and I will be receiving the bonus for my period served in Hong Kong in April 2025. I understand from my colleagues that they will file a additional IR56G in April 2025 and show the period of income as 2024/25.

I want to understand if I can consider this bonus as my income for the year of assessment 2025/26 as the bonus amount was not due be paid to me before March 2025? If yes, then how do I go about claiming this?

[RobRoy]

These are typically the cases were some Tax consultant is included around the re-allocation so this is handled correctly. From my experience the tax can either be paid as of where you are when the bonus is paid. Or you can claim some type of split of the tax payment, so in your case you leave in Oct, the bonus is I assume for your work in 2024, so Jan-Oct should be paid HK tax for the bonus and Oct-Dec the country you move to tax. This is dependent on that your new country accepts such tax assessment, could be a hard no.

I should add since your company will mark it as 2024-2025 income in HK, you will have to pay tax on it in HK, so probably option 2 is more likely for you. Im not sure if there is an option to (legally) only pay tax on it in HK, perhaps dependent on how your company files?

[PLamHK]

The answer may also be affected by whether you are posted on an overseas assignment whilst remaining an employee of the HK company or are transferred to new employment contract based in the destination country.

[bdw]

It doesnt matter if the bonus is paid to you in March 2025 (24/25 year), or in April 2025 (25/26 year). Its still related to your work in 24/25 year and you will be taxed on it in 24/25. You will pay taxes for 24/25 first based on no bonus (in October 2024 when leaving HK), then bonus is paid anytime in 2025, then IRD will re-open the 24/25 year and make adjustments, send you a revised notice of assessment, demanding an additional amount of tax payable.

Exact same thing happened to me when I was relocated by employer Dec 2019, received a bonus in middle of 2020 for the 2019 year.

[Shiojiri Hiro]

https://kpmg.com/cn/en/home/insights...bonus%3B%20and

[Panda143]

I read online in some consultation between IRD and HKICPA in 2022 annual meeting where IRD had agreed the year of assessment should be the year in which the employee is eligible to claim the amount provided the employee has not ceased to work with the employer. Whether overseas employment with the same company would be considered for this or not, I am not sure.

My real concern is under normal course I have been paying tax on this bonus in the year of receipt so technically i will be paying taxes for 2 bonuses in 2024/25. If I can move this to 2025/26 then considering all my basic deductions I can save a lot of tax on this

[Panda143]

https://kpmg.com/cn/en/home/insights...bonus%3B%20and

Yes i saw this, my only issue is whether I need to ask my employer to amend IR56G or I can dispute my assessment and ask IRD to rectify this from their side. Because IR56G really has no specific field to enter such information

[shri]

Have you tried to either contact them through eTax or used this form?

https://www.gov.hk/en/residents/taxe...supplement.htm

[Panda143]

Have you tried to either contact them through eTax or used this form?

https://www.gov.hk/en/residents/taxe...supplement.htm

I have written a email to them, but no response from their side so far

[shri]

Through eTax? When did you send it? Takes a few days .. and today's a holiday anyways.