Global

Details

  • Service: Tax, Global Mobility Services, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 8/5/2014

Hong Kong - Possible effects of OECD’s “common reporting standard” 

August 5: What could be the effects, for Hong Kong, of the OECD’s “common reporting standard” with respect to the automatic exchange of tax information?

Background

In July 2014, the Organisation for Economic Co-operation and Development (OECD) released the full version of a new global standard for the exchange of tax information between jurisdictions. Read TaxNewsFlash-Europe.


Adoption of the OECD’s “common reporting standard” would be a major step towards a globally coordinated approach to the disclosure of financial account information and a key component of international efforts to address tax evasion.

Possible implications for Hong Kong

Hong Kong has neither adopted the standard nor agreed to exchange information on an automatic basis. Under Hong Kong’s current legislation, relevant tax information is supplied by Hong Kong only upon specific and valid requests received from the competent authority of a tax agreement partner country. Hong Kong’s government made clear in early 2014 that its current policy is not to exchange information on either an automatic or spontaneous basis.


Given the increasing global support for the OECD standard, Hong Kong could face increased pressure to adopt and implement the standard in the future. To do so, the Hong Kong government would have to enact legislation that provides a legal framework for the automatic exchange of information. Also, specific tax administrative resources would be required for an effective, practical implementation of the standard.


Read an August 2014 report prepared by the KPMG member firm in Hong Kong: Automatic exchange of information – a new global standard




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