Automatic Exchange of Financial Account Information (AEOI) and Common Reporting Standard (CRS) in Hong Kong
Over 100 jurisdictions including Hong Kong are committed to implement AEOI under CRS. This is an initiative carried out by the Organization for Economic Co-operation and Development (OECD). CRS is the standard developed by the OECD with the aim to identify tax residents and provide systematic and periodic exchange of their financial account information between participating jurisdictions. This is built upon information sharing legislation as a measure to improve tax transparency and counter tax evasion. Hong Kong has committed to implement CRS locally from January 1, 2017. Hong Kong conducts AEOI on a reciprocal basis with partner jurisdictions with which Hong Kong has signed a comprehensive avoidance of double taxation agreement (CDTA) or tax information exchange agreement (TIEA).
The Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong) (IRO) requires us, as one of the financial Institutions in Hong Kong, to identify financial accounts held by tax residents of reportable jurisdictions with us in accordance with due diligence procedures and report the required information of the reportable accounts to the Inland Revenue Department of the Government of the Hong Kong Special Administrative Region (IRD). The required information may include (but is not limited to) client name, address, tax identification number, jurisdiction of residence, date of birth, account number, account balance, certain income, amount of sale proceed of financial assets and account status. We expect to make the first reporting in 2018 with information collected starting from the end of 2016.
What does it mean to you?
As required by the IRO, we will report to the IRD the required information of clients who have been identified by us as being residents (whether individuals or entities) for tax purposes in jurisdictions that have agreed to automatically exchange information with IRD. IRD may then send the information to the tax authorities of jurisdictions in which clients may be residents for tax purposes. Accordingly, our clients are required to provide to us the required information. In the case of an existing client, we may contact you to provide a self-certification containing the required information and a declaration of your tax residency. In the case of a new client, you will need to provide a self-certification as part of the account opening process. As a valued customer, we kindly ask you to keep our company constantly informed of any update relevant to your account information including (but not limited to) the required information contained in a self-certification.
You can find information about tax residency in the website of OECD’s AEOI portal:
http://www.oecd.org/tax/automatic-exchange
For more information, please visit IRD’s website:
http://www.ird.gov.hk/eng/tax/dta_aeoi.htm
Please note that where appropriate, professional advice should be sought independently. This communication is for information only and shall not be considered in any case as tax, legal or other advice.
Should you have any questions about the contents of this letter, please call our 24-hour InvestLine at (852) 2878-5555 or contact your Investment Representative.