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On January 23, Hong Kong and South Korea signed a Competent Authority Agreement (CAA) to allow for the automatic exchange of financial account information in tax matters (AEOI) from 2019.
"Since the signing of the first two agreements for AEOI with Japan and the United Kingdom in late 2016, we have been seeking to expand Hong Kong's AEOI network with other tax treaty partners. The signing of the agreement with South Korea signifies the Government's efforts in this respect," a Hong Kong Government spokesperson said.
Hong Kong's Government has previously emphasized that it is supportive of the international efforts to enhance tax transparency and combat cross-border tax evasion, and that it would expand Hong Kong's network of CAAs with partner countries, particularly those with which it has previously completed a double taxation agreement (DTA).
South Korea's Ministry of Strategy and Finance, when announcing the signing of the CAA, also stated that, although the two countries have provided each other with tax information on request since 2016, when the South Korea-Hong Kong DTA entered into force, the CAA "will provide a more effective way to avoid international tax evasion."
The Ministry added that, so far, South Korea has signed bilateral CAAs with the US and Singapore. It is to work on further agreements with 45 countries in 2017, including the Netherlands, Belgium, and Ireland, and is expected to add 31 countries in 2018 to the list of CAAs in force.
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