On June 30, The Inland Revenue (Amendment) (No. 3) Ordinance 2016 (the Amendment Ordinance) came into effect, the Hong Kong Inland Revenue Department has informed. The Ordinance enables Hong Kong to comply with the international standard for automatic exchange of financial account information regarding tax matters.
In 2014, Hong Kong indicated its support for implementing automatic exchange of financial account information in tax matters (AEOI) on a reciprocal basis with appropriate partners with a view to commencing the first exchanges by the end of 2018. Following several rounds of engagement with stakeholders over the past two years and the public consultation exercise in 2015, the Government introduced an amendment bill into the Legislative Council (LegCo) in January 2016, which was passed by the LegCo on June 22, the Hong Kong Inland Revenue Department has informed.
An Ordinance to amend the Inland Revenue Ordinance will enable Hong Kong to comply with the international standard for automatic exchange of financial account information regarding tax matters and to provide for related matters.
"By providing a legal framework in Hong Kong for implementing AEOI, the Amendment Ordinance enables Hong Kong to deliver its pledge of support for the new international standard on AEOI as promulgated by the Organization for Economic Cooperation and Development (OECD)," a Government spokesman said.
Hong Kong will now start identifying partners from among the 42 economies who have signed agreements with Hong Kong on comprehensive avoidance of double taxation or on tax information exchange.
"Potential AEOI partners include those who have put in place a relevant legal framework for implementing AEOI which meets the OECD standard, and who have relevant safeguards in their domestic law for protecting the data privacy and confidentiality of information exchanged," the spokesman said.
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