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If share option has been granted to you by
virtue of your employment or office in Hong Kong, a
gain realized from its subsequent exercise, assignment or
release after your permanent departure from Hong Kong is nonetheless
chargeable to Salaries Tax. Both you and your employer
have to report the share option gain even after your departure.
With a view to finalizing your salaries tax
liabilities prior to your departure, you may elect to have
the liability ascertained on the basis of a notional
exercise of the option. The Inland Revenue Department
would calculate the gain as if it is realized had the share
option been exercised on a day within 7 days before the date
of submitting your tax return for the year of assessment in
which you permanently depart from Hong Kong.
If you have not made such election before
your departure, the Inland Revenue Department is prepared
to accept an election made within 3 months from the date of
permanent departure from Hong Kong. In this case, the date
of departure will be taken as the date of the notional exercise
for purposes of calculating the gain.
In the event that you have a non-Hong Kong
employment and the option in question is a conditional one
in respect of which the vesting period has not expired on
the date of notional exercise, the gain would be calculated
on the basis that the vesting period would be deemed to end
on that date.
Should you wish to make such an election,
please attach a statement to the tax return to the effect
that the gain is offered for assessment on the understanding
that no further liability will arise when the option is actually
exercised, assigned or released after departure from Hong
Kong. On the other hand, if the gain in respect of the actual
exercise, assignment or release subsequently turns out to
be less than the amount assessed in respect of the notional
exercise, you may apply for appropriate re-assessment based
on the actual gain.
For further details, please refer to the
followings:
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