Common Reporting Standard

What is CRS and AEOI?

The Common Reporting Standard (CRS), developed by the Organisation for Economic Co-operation and Development (OECD), is a global framework designed to combat tax evasion through the Automatic Exchange of Financial Account Information (AEOI) between jurisdictions.

In Hong Kong, the Inland Revenue (Amendment) (No. 3) Ordinance 2016, enacted on 30 June 2016, established the legal framework for AEOI, effective from 1 January 2017. The first exchange of information occurred in 2018, covering over 120 reportable jurisdictions. The Inland Revenue Department (IRD) conducts regular reviews, including enquiry letters and site inspections, to ensure effective CRS implementation. As a result, financial institutions (FIs), both traditional and non-traditional, are prioritising compliance and data quality to meet regulatory expectations.

Hong Kong CRS/AEOI requirements

Obligations of financial institutions (FI)

Under the CRS/AEOI regime, entities in Hong Kong can follow a streamlined four-step approach to ensure compliance:

	Financial institution	Conduct CRS legal entity analysis Determine if the entity meets the FI definition under CRS
	Financial accounts	Formulate CRS due diligence policies and procedures Identify financial accounts
	Review accounts	Apply due diligence procedures Identify reportable accounts
	Data collection and reporting	Gather required information Report the information for CRS purposes

Key CRS timeline in Hong Kong

Registration: FIs must notify the IRD via the AEOI Portal within 3 months after the date of the first occasion on which they commenced to maintain a reportable account.
Reporting: FIs receive electronic notices from the IRD in January each year via the AEOI Portal, requiring submission of Financial Account Information Returns within 5 months.

Our services

PwC delivers tailored compliance and governance solutions to ensure regulatory adherence:

Legal entity analysis: We conduct CRS legal entity analysis to identify financial institution, and its financial and reportable accounts.
Policy and framework development: We design or enhance CRS-related policies, procedures, and controls to prepare clients for regulatory reviews.
IRD enquiry support: We provide expert assistance to FIs navigating IRD enquiries, ensuring robust and timely responses that demonstrate compliance. Our dedicated team collaborates closely with clients to prepare professional response letters that effectively substantiate adherence to CRS requirements.
Health check: We provide comprehensive CRS health check services to strengthen your compliance framework. We meet with your team to review compliance processes and pinpoint risks. We evaluate your policies, manuals, and training materials to ensure they meet CRS standards, supported by sample checks. Additionally, we use automated tools to verify the accuracy and completeness of your returns, addressing any issues proactively.
Ongoing advisory: We offer continuous, tailored advisory services to support FIs in navigating the complexities of CRS compliance. Our team serves as a trusted partner, providing prompt and expert guidance on a wide range of CRS-related enquiries, including due diligence, reporting, training, regulatory updates, and other ad-hoc CRS questions.

PwC empowers FIs to meet their CRS obligations with confidence. Our expert team provides:

Initial registration support: Assistance in obtaining an e-Cert and completing AEOI registration with the IRD.
Annual reporting assistance: Comprehensive support for preparing and submitting Financial Account Information Returns to ensure compliance.

PwC simplifies CRS compliance for FIs facing challenges from manual processes and increased IRD scrutiny. Our all-in-one solution supports every step, from client onboarding to annual reporting, acting as your single point of contact.

Our CRS risk assessment tool enhances compliance efficiency and accuracy by:

Extracting data from your systems.
Checking and correcting data for accuracy.
Identifying reportable accounts using CRS rules.
Creating IRD-compliant CRS XML files.

Our CRS reporting solution automates the entire reporting process:

Data extraction: Pulls data from proprietary systems.
Quality validation: Checks for mandatory fields, invalid characters, and tax residency accuracy.
Reportable account identification: Applies CRS rules to determine reportable accounts.
XML generation: Produces IRD-compliant XML files, with summary and exception reports for pre-submission review.