AEOI: Guidance for Hong Kong Financial Institutions.

What you need to know about the Automatic Exchange of Information (AEOI) if you are responsible for a Hong Kong Financial Institution.

About the author

+852 3192 7083

What is it?

The Hong Kong Inland Revenue Department (IRD) has legislation in place to facilitate exchanges of information relating to the account holders and beneficial owners of Hong Kong Financial Institutions with other tax authorities worldwide. The primary intention of this legislation is to crack down on tax evasion by non-compliant individuals and entities.

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 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 or beneficial owners and report them to the tax authorities.

The definition of a Financial Institution varies under the two different regimes but in both cases it is wide-ranging. As well as the obvious banking or investment institutions, this can include small family trusts, unlisted or owner managed companies, partnerships and even charities where the main source of income is derived from financial investments.

What do you need to do?


Determining whether your organisation is a “Financial Institution” under these rules is the first and most crucial step.


Financial Institutions must register with the tax authorities. For Hong Kong Financial Institutions this will be the Hong Kong Inland Revenue Department (IRD) and, in some cases, the US Internal Revenue Service (IRS).

Due diligence

Specific due diligence procedures are required of Financial Institutions to identify potentially reportable account holders or beneficial owners. These will be account holders or beneficial owners who are resident outside of Hong Kong in another jurisdiction or who (for FATCA purposes), are US persons. The prescribed procedures on how this must be done are very detailed and there is a penalty regime for Financial Institutions that fail to comply.


An annual CRS report must be filed with the IRD by Hong Kong Financial Institutions by 31 May following the calendar year in question. The report must include details of any reportable accounts or beneficial owners, including the value of the account or equity interest and where the account holder is `resident for tax purposes. This information is then exchanged by the IRD with the relevant jurisdictions. Separately, an annual FATCA report must be filed directly with the IRS to report US account holders. The due date for filing the report is 31 March following the calendar year being reported.


Financial Institutions may be required to certify their status under these rules to other Financial Institutions by completing “self-certification” forms.

How can we help?

Buzzacott’s Expatriate Tax Services team can help Financial Institutions with classification, registration, due diligence, reporting and self-certification. If you are in any doubt as to whether you are affected by these rules, or for advice on maintaining compliance, please speak to your usual Buzzacott contact, or:

Allan Wilkinson


E | wilkinsona@buzzacott.hk

T | +852 3752 8871