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On April 25, an order was gazetted in Hong Kong to implement the tax information exchange agreement (TIEA) with the United States that was signed on March 25 this year, as part of preparations for the US Foreign Account Tax Compliance Act in Hong Kong.
"This is the first TIEA signed by Hong Kong, after the legal framework for entering into TIEAs with other jurisdictions was put in place in July last year," a Government spokesman said. "TIEAs provide for the exchange of information by the Inland Revenue Department (IRD) upon request made by another jurisdiction in relation to the assessment or enforcement of tax matters."
Hong Kong is now able to complete TIEAs, providing for the exchange of tax information by the IRD upon request from another jurisdiction. Previously, such provisions were included solely in comprehensive double taxation agreements.
The order will be tabled at the Legislative Council on April 30 for negative vetting, and will only take effect after Hong Kong has completed all the necessary legislative procedures for bringing the agreement into force.
It is also expected that the TIEA will provide the necessary basis for Hong Kong to enter into an intergovernmental agreement to adhere to the United States' Foreign Account Tax Compliance Act, which is due to come into operation on July 1, 2014.
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