The Hong Kong government plans to expand the list of reportable jurisdictions for 2017 under the common reporting standard (CRS) from two to 74 to meet international expectations.
Under the CRS framework, financial institutions in Hong Kong are required to identify and report to the Inland Revenue Department (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. CRS reporting will commence from 2018 with respect to 2017 account information.
Because Hong Kong is not a sovereign jurisdiction, it cannot be a direct signatory to the OECD multilateral agreement for the automatic exchange of CRS information. Hong Kong therefore originally planned to collect and report CRS information to other countries based on bilateral agreements.
Hong Kong is under pressure to accelerate this process. In particular, the European Union (EU) has announced that it will prepare a blacklist of “noncooperative tax jurisdictions”. One of the listing criteria relates to the implementation of CRS. Specifically, the EU requires arrangements to be in place for the exchange of CRS information with all member states of the EU by the end of 2017. As a result, the Hong Kong government plans to add 72 jurisdictions (in addition to Japan and the UK) to Hong Kong’s list of reportable jurisdictions for CRS purposes. The additions include all EU Member States, all of Hong Kong’s tax treaty partners that have committed to CRS, and other jurisdictions that have expressed an interest to the OECD in exchanging CRS information with Hong Kong. The new jurisdictions include Australia, Canada, China, France, Germany, India, Korea, Malaysia, Russia, and Switzerland.
The Organisation for Economic Co-Operation and Development (OECD) 16 March 2017 announced that Hong Kong signed a CAA with six treaty partners—a further step toward Hong Kong's implementation of automatic exchange of financial account information (AEOI) on a reciprocal basis with appropriate partners by the end of 2018.
Read a March 2017 report [PDF 216 KB] prepared by the KPMG member firm in Hong Kong
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