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Tax Information Exchange Agreements Hong Kong

As the pressure for greater tax transparency and closer cross-border cooperation between tax authorities continues to grow, Hong Kong should be forced to strengthen its TIEA network with countries that are not currently willing to sign a CDTA with Hong Kong. In addition, with the publication by the OECD on 13 February 2014 of the Common Communication Standard, which provides for a new international standard for automatic EoI3s, Hong Kong will be increasingly under pressure to switch to automatic EOI as the latest standard for information exchange. EoI is a developing area in the international arena and Hong Kong. Multinational enterprises with cross-border transactions/operations should remain adapted to developments in this area and be prepared to assess the potential impact of the evolution of the ECI on them. The main difference between a TIEA and a CDTA is that a TIEA tends to address more precisely issues related to the practical implementation of information exchange. For example, the HK-US TIEA has established a list of information that the requesting party must provide in its EoI applications and contains provisions that are addressed to the address of the party that must bear the costs of exchanging information. This agreement, published in April 2002, is not a binding instrument, but includes two model bilateral agreements. A large number of bilateral agreements have been based on this agreement (see below). A TIEAs request template has been developed to assist the competent authorities of TIEA partners in requesting information. It is available in English and French as well as Spanish, German, Italian, Japanese, Korean and Turkish. In this way, jurisdictions may base a bilateral agreement on the competent authority for the purpose of introducing the automatic exchange of information in accordance with the common information standard or the automatic exchange of country reports on an TIEA, in particular where the automatic exchange of information under a relevant multilateral agreement of the competent authority is not (yet) possible. Reproduction with permission from PricewaterhouseCoopers Ltd., an entity registered in Hong Kong.

Copyright 2014 PricewaterhouseCoopers Ltd. All rights reserved. The information contained in this article, gathered on the date indicated in the article and based on the laws and information available applicable on that date, is only of a general nature and readers should be advised specifically by their professional advisors for their circumstances. “TIEA with the United States provides the necessary basis for Hong Kong to guarantee EoI to requests regarding information provided by Hong Kong financial institutions to the United States under FATCA … Subject to the conclusion of the ongoing talks, Hong Kong intends to conclude an intergovernmental agreement with the United States to take steps that will help facilitate compliance by Hong Kong`s financial institutions. As a complementary measure, the signing of a TIEA with the United States will allow the US tax authorities to submit, under certain conditions, an EoI application to the IRD.┬áThe purpose of this Agreement is to promote international cooperation in tax matters through the exchange of information. It was developed by the OECD Global Forum Working Group on Effective Exchange of Information. Hong Kong and the United States signed a Tax Information Exchange Agreement (TIEA) on 25 March 2014.

The agreement is the first of its kind signed by Hong Kong and allows for the free exchange of tax information on request between Hong Kong and the United States.