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Hong Kong To Automatically Exchange Tax Info With 75 States

by Mary Swire,, Hong Kong

22 June 2017

Hong Kong has gazetted legislation to establish provisions to automatically exchange financial account information with other territories to support international tax collection efforts.

The Inland Revenue (Amendment) (No. 2) Ordinance 2017, which will enter into force on July 1, will enable Hong Kong to implement automatic exchange of financial account information in tax matters (AEOI) in line with the OECD's Common Reporting Standard more effectively, the Government said.

"The Amendment Ordinance [ensures] that Hong Kong can preserve the financial account information from the second half of 2017 for exchanging with other jurisdictions. This enables the effective implementation of AEOI without introducing an undue compliance burden to financial institutions," the Government said.

To implement AEOI, from July 1, 2017, the list of "reportable jurisdictions" under the Inland Revenue Ordinance will be expanded to cover 75 jurisdictions, comprising 13 confirmed AEOI partners and 62 prospective AEOI partners. The 62 prospective AEOI partners include:

  • Jurisdictions which have expressed an interest in conducting AEOI with Hong Kong to the OECD or jurisdictions suggested by the OECD;
  • Hong Kong's tax treaty partners which have committed to AEOI; and
  • All member states of the EU.

The Government explained: "The Amendment Ordinance does not alter the privacy and data protection requirements on AEOI under the Inland Revenue Ordinance. Hong Kong would only conduct AEOI with jurisdictions which have signed dedicated exchange agreements with us and have fulfilled the OECD's standard and relevant safeguards for protecting data privacy and confidentiality of the information exchanged."

"For a member of the public, if he is not a tax resident of any jurisdictions outside Hong Kong, financial institutions in Hong Kong will not report his information to the Inland Revenue Department (IRD) under this regime."

TAGS: compliance | Foreign Account Tax Compliance Act (FATCA) | tax | interest | FATCA | law | agreements | legislation | Hong Kong | Compliance | Tax

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