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Hong Kong Supports New OECD Tax Info Standard

by Mary Swire,, Hong Kong

16 September 2014

On September 15, the Government indicated, to the Global Forum on Transparency and Exchange of Information for Tax Purposes, Hong Kong's support for the new global standard on automatic exchange of information for the purpose of enhancing tax transparency and combating cross-border tax evasion.

In July this year, the Organisation for Economic Co-operation and Development released a Common Reporting Standard for Automatic Exchange of Financial Account Information in Tax Matters, calling on governments to obtain detailed account information from their financial institutions and exchange that information automatically with the jurisdictions of residence of account holders on an annual basis.

The Global Forum, consisting of some 120 member jurisdictions, including Hong Kong, for the pursuance of a tax transparency agenda, has invited all of its members to commit to implementing the new global standard, and Hong Kong has now pledged its support to the invitation.

The Secretary for Financial Services and the Treasury, Professor K C Chan, said: "It is crucial for Hong Kong to adopt the latest global standard on tax transparency in order to maintain our international reputation and competitiveness as an international financial and business center."

He also confirmed that, "in taking the matter forward domestically, the Government will go through the usual due process of engaging relevant stakeholders, addressing relevant policy and legal issues involved and seeking the Legislative Council's approval of the legislation required to implement the new global standard."

It was added that Hong Kong is committed to implementing the new global standard on a reciprocal basis with appropriate partners which can meet relevant requirements on protection of privacy and confidentiality of information exchanged and ensuring proper use of the data. According to the latest timeline allowable by the Global Forum, the first automatic information exchanges are to commence by the end of 2018.

The Government has also stressed that, over the past years, Hong Kong has been enhancing its regime to meet the evolving international standard on exchange of information, including removing the domestic tax interest requirement in conducting exchange of information under comprehensive avoidance of double taxation agreements, and putting in place the legal framework for Hong Kong to enter into tax information exchange agreements with other jurisdictions.

In return, the Global Forum has recognized Hong Kong's efforts in this regard, and has affirmed that Hong Kong is an effective and co-operative partner in exchanging information with other jurisdictions.

TAGS: compliance | tax | tax information exchange agreement (TIEA) | double tax agreement (DTA) | tax compliance | law | international financial centres (IFC) | Organisation for Economic Co-operation and Development (OECD) | offshore | agreements | legislation | Hong Kong | Tax

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