Hong Kong: Hong Kong commits to the Common Reporting Standard
The Standard for Automatic Exchange of Financial Account Information in Tax (the Common Reporting Standard (CRS)), which is intended to facilitate the automatic exchange of financial information, was approved by the G20 finance ministers and Central Bank governors at their meeting in Cairns, Australia on September 20-21 2014. Shortly before that, in an announcement on September 15 2015, the Secretary for Financial Services and the Treasury, Professor KC Chan, committed Hong Kong to implementing the CRS.
Existing legislation in Hong Kong only provides for exchange of information on a request basis and the adoption and implementation of the CRS will require amending legislation. With this in mind, the secretary further announced that the HKSAR Government would soon engage stakeholders, address policy and legal issues, and ultimately seek the Legislative Council's approval for the legislation required to implement the new global standard for the automatic exchange of information.
This approach is similar to that adopted by the government when it introduced legislation in 2013 enabling Hong Kong to enter into standalone tax information exchange agreements (TIEAs). In this instance, the consultation process lasted around 12 months and included consultations with business and industry bodies, as well as legal, financial and accountancy representative groups.
The government has indicated that it expects legislation to allow for the automatic exchange of information under the CRS to be enacted during 2016 with the first exchanges of information expected in 2018.
In a related development, Macau has announced that, like Hong Kong, it will shortly commence legislative measures to amend its domestic law so it is able to fully comply with the CRS.
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