Section 51(7) of IRO: A person chargeable to tax must notify the Revenue of his imminent departure from Hon Kong if the departure period is more than one month. Such notice must be given at least one month before the expected date of departure although the Revenue can accept shorter notice. Notification is not required if the person has to frequently travel in and out of Hong Kong in the course of his employment or business.

Section 52 of IRO: The employer must notify the Revenue of his employee's imminent departure from Hong Kong. Notification should be made in the form IR56G reporting the date of departure as well as the employee's income up to the date of departure. Such notice must be given at least one month before the date of departure. After the notification, the employer should immediately withhold payment of any sum due to the employee until he receives a "letter of release" from the Revenue.

As soon as the Revenue receives a notification that a taxpayer is about to leave Hong Kong permanently, a tax return for that year of assessment will be issued to the employee. The employee should call at the Revenue to file the tax return and get the tax assessment for tax payment as early as possible.

If the person does not clear his tax liabilities before he leaves Hong Kong, the Revenue will issue a "recovery letter" to the employer requiring payment of tax from the sum withheld. If the tax is large, he may be stopped from leaving Hong Kong.

If the person has outstanding share options as part of his taxable income, he can elect for a notional exercise for computing the gain on the share options. It assumes that the share options are exercised on a day as chosen by the person within 7 days before the filing of the related tax return. Given this assumption, the taxable gain is computed for the year of departure, and there will be no further tax liability when the share options are actually exercised or sold afterwards. It is advisable for the taxpayer to make the election if the taxable gain so computed is zero or quite small.

If the person withdraws accrued benefits from a recognized retirement scheme, he can get exemption under the Proportionate Benefit rule.

Although strictly speaking the tax clearance applies to taxable cases only, a person with no tax payable still need to apply for the clearance if his employer has made the notification and has withheld payment of his income under Section 52 of IRO.