Under the CRS framework, financial institutions in Hong Kong are required to identify and report to the IRD the financial accounts held by tax residents of overseas reportable jurisdictions (including individuals, entities and controlling persons of certain entity accounts) on an annual basis. The IRD will pass this information to the tax authority in the relevant overseas jurisdiction. Reporting will commence from 2018 with respect to 2017 account information.
Whilst over 100 jurisdictions have committed to CRS, the IRD will exchange information only with jurisdictions with which Hong Kong has a tax treaty or a tax information exchange agreement in place, and with which it has entered into a supplemental agreement providing for such exchange.
To facilitate compliance with the CRS requirements, the IRD has recently published guidance for financial institutions to assist them in complying with the CRS obligations.