The Hong Kong Inland Revenue (Amendment) Bill 2016 was gazetted 8 January 2016. "The Bill seeks to put in place a legal framework for Hong Kong to implement the new international standard for automatic exchange of financial account information in tax matters (AEOI) as promulgated by the Organisation for Economic Co-operation and Development (OECD)", a Government spokesman said in a press release.
Key points include:
- Subject to the passage of local legislation, AEOI would be implemented on a reciprocal basis with appropriate partners who could meet relevant standards on protection of privacy and confidentiality of information exchanged and ensuring proper use of the data exchanged.
- Once the AEOI agreement is in place, financial institutions have to put in place the prescribed due diligence procedures in order to identify and collect information of the relevant financial accounts in 2017.
- The first information exchanges would take place by the end of 2018.
- The Inland Revenue Department (IRD) will exchange information with the tax authorities of AEOI partner jurisdictions on an annualbasis.
According to the press release, Hong Kong intends to conduct AEOI only with their partners with whom they have signed comprehensive avoidance of double taxation agreements (CDTAs) or tax information exchange agreements (TIEAs), on a bilateral basis.