The primary intention of this legislation is to crack down on tax evasion by non-compliant individuals and entities. If you hold any kind of account with a Hong Kong Financial Institution or if you are a beneficial owner of an entity (such as a company or trust) that is classified as a Financial Institution, then the legislation will affect you.
Did you know?
“Automatic Exchange of Information” is the collective term for the two regimes currently in place in Hong Kong to facilitate the exchange of financial information with other jurisdictions. They are as follows:
FATCA (Foreign Account Tax Compliance Act) - which facilitates information exchange between the US and participating jurisdictions, including Hong Kong.
CRS (Common Reporting Standard) - which facilitates information exchange between a large and growing number of jurisdictions throughout the world (excluding the US).
These regimes place the burden of compliance on Financial Institutions, which are required to carry out due diligence procedures on all of their account holders and report them to the tax authorities.
What do you need to do?
As part of this process, many account holders (both individuals and entities) will be receiving “self-certification” forms from the Financial Institutions they have accounts with. The information that is included in these forms will allow the Financial Institutions to determine the tax residence and classification of the account holder under the two regimes.
In many cases these forms are detailed, complicated and confusing, but the account holder is responsible for completing their own forms. The Financial Institutions cannot provide legal or tax advice. Therefore, if the account holder has questions about how to complete the forms, they will need to contact a tax adviser.
How we can help?
Buzzacott’s Expatriate Tax Services team can help account holders prepare their self-certification forms and determine their status under the two tax information exchange regimes. If you need our help, please contact Allan or Virginia, or fill out the form below.