Hong Kong Tax News Flash

Mar 2017, Issue 3

Hong Kong revises its strategy on implementing automatic exchange of financial account information

The HKSAR Government is proposing to expand the current list of "reportable jurisdictions" for automatic exchange of financial account information (AEOI) purpose from 2 to 74 jurisdictions. Under the proposal, for the first AEOI reporting in May 2018, financial institutions (FIs) in Hong Kong will need to collect and furnish financial account information (1) for the period from 1 January to 31 December 2017 for Japan and the UK and (2) for the period from 1 July to 31 December 2017 for the newly added 72 reportable jurisdictions, including China and Singapore. In subsequent years, FIs are expected to collect and furnish full-year data for all 74 reportable jurisdictions. In addition, the HKSAR Government is seriously considering the possibility of applying the Multilateral Convention on Mutual Assistance in Tax Matters to Hong Kong. 

FIs already taking the "wider approach" should be less affected by the proposed changes. FIs taking the "targeted approach" should revisit their current policy, data collection strategy and methodology, and other resources on fulfilling the obligations under AEOI as soon as possible and consider making any necessary changes before 1 July 2017. If they have a good reasonable excuse for not being able to furnish the required additional information with respect to the newly added reportable jurisdictions by May 2018, they can engage in discussion with the IRD on the possible alternatives as soon as practicable.

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