US tax officials in Hong Kong have no enforcement powers in the territory and must abide by local laws, Secretary for Financial Services and the Treasury, Professor KC Chan has clarified.
Chan said the US Internal Revenue Service (IRS) attache at the US Consulate General in Hong Kong, and a local assistant, must abide by local laws.
"Same as all consular officers in Hong Kong, they have no law enforcement powers in Hong Kong," Chan said.
"There is no question of those personnel enforcing US laws in Hong Kong," he added.
The Wall Street Journal recently reported that the IRS is currently in the process of recruiting and training hundreds of new enforcement personnel with an emphasis on auditing the tax affairs of the wealthy with significant overseas connections. According to this report, lawyers and advisers in Hong Kong have been informed that the IRS is planning to add several enforcement positions at the US Consulate in the territory.
Buoyed by the success of last year's amnesty on undeclared offshore income, IRS Commissioner Doug Shulman revealed last October that the IRS is opening more representative offices abroad in places like Panama, China and Australia, and will also increase staffing levels in existing overseas offices, which include Barbados and Hong Kong.
A comprehensive report in our Intelligence Report series, examining in depth the situation of offshore transparency and secrecy in a number of the most prominent jurisdictions, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report2.aspTags: tax | law | offshore | offshore confidentiality | audit | Australia | Hong Kong | United States | tax avoidance | enforcement | Hong Kong | Australia
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