letter of release

If you need tax clearance in Hong Kong, a Letter of Release from the Inland Revenue Department (IRD) is an important document—especially for workers who are quitting work or departing Hong Kong for good. Here we will explain what the letter is, who needs it, and how FastLane HR can help you with it.

What is Letter of Release from IRD?

It is an official document from the Hong Kong Inland Revenue Department (IRD) stating one has settled all tax payments. It is most commonly requested when an employee—especially a foreigner—resigns, gets terminated from work, or plans to leave Hong Kong.

This letter gives employers the green light to pay the last salary and other entitlements without fear of incurring tax charges.

To whom is a Hong Kong letter of release necessary?

IRD needs a release letter where there can be some future tax obligations. This generally includes:

  • Foreign workers departing Hong Kong permanently
  • Staff quitting jobs at a Hong Kong business
  • Employers ensuring that they abide by tax regulations when staff depart.

If you are an employer, you must hold back the final payment of the employee until you get the letter of release.

Documents Needed to Procure a Tax Clearance

To get an IRD tax clearance letter, you need to provide several documents:

  • IR56F – For employees terminating employment
  • IR56G – For employees departing Hong Kong
  • Final salary details, including unused leave, bonuses, and more.
  • Documents in support: passport copies, departure flight information (if any), visa cancellation letter (for expatriates)
  • Employer’s written statement or termination letter

Easy Steps in Getting a Letter of Release

1: Notify the IRD.

Employers must inform the IRD at least one month before the employee’s final working day.

2: File IRD Forms

File the correct form:

  • IR56F for when the employee ceases working but remains in Hong Kong.
  • IR56G if the employee is departing Hong Kong for good.

3: Pay Any Unpaid Taxes

When the forms are received, the IRD will check the tax position of the employee. Any tax due must be paid before the letter will be issued.

4: Receive Your Release Letter

Upon confirmation of payment in full, the IRD will issue the Letter of Release, usually within 10–21 working days.

 

How Long Does the Process Take?

The whole process can take 2 to 4 weeks. This will vary with the correctness of documents submitted and the workload at the IRD.

Delays can result if:

  • The tax returns are incomplete
  • Unpaid tax returns or account balances
  • The worker has many sources of income.

What if you do not get a Letter of Release?

Failure to receive a release letter can lead to serious problems:

Employers might be compelled to withhold cash by law.

  • Workers can be punished or held back from leaving Hong Kong
  • Employers face non-compliance and tax audits by the IRD

This is why it is important to use a professional company like FastLane HR.

How FastLane HR Can Help

At FastLane HR, we make tax clearance easier for both employees and employers by:

  • Preparing and filing IR56F / IR56G returns
  • Payment and documentation of taxes
  • Collaborating with the IRD
  • Tracking issue of Letter of Release
  • Guaranteeing total compliance with Hong Kong taxation legislation

With our seasoned tax experts, you can spare yourself delays, penalties, and paperwork hassle.

Need help with Hong Kong tax clearance?

Let us prepare your Letter of Release on time.

Contact Us Today!

Conclusion

Getting a Letter of Release from the IRD is an essential step in the process of tax clearance. For an employer, it helps them stay compliant with regulations; for an employee, it helps them exit without issues.

Eliminate mistakes, reduce time, and adhere to the regulations with FastLane HR’s expert tax services.