Hong Kong can now carry out international automatic exchange of information
On 30 June 2016, the tax legislation on implementing automatic exchange of information (AEOI) or the Common Reporting Standard in Hong Kong was gazetted and became effective.
As the next step, the HKSAR Government aims to identify at least one suitable jurisdiction as an AEOI partner of Hong Kong and conclude negotiations with it by the end of 2016 to pave way for financial institutions (FIs) in Hong Kong to start conducting due diligence procedures in respect of their financial accounts in 2017. FIs are then expected to register with the Inland Revenue Department (IRD) by September 2017 and file the first AEOI returns to the IRD by May 2018.
Given the tight implementation schedule of AEOI in Hong Kong, FIs should closely monitor their progress in putting in place effective information system and procedures for complying with the relevant due diligence and reporting obligations under the new AEOI regime. They should also stay tuned of the Departmental Interpretation and Practice Note on AEOI that is expected to be issued by the IRD in which further guidance on the implementation details will be provided.
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