In response to input from stakeholders the government will make changes to a legislative proposal to implement the new international standard on automatic exchange of financial account information in tax matters (AEOI).
Based on valuable feedback from over 40 stakeholders, the government has formulated a consolidated response and will refine the legislative proposals as set out in the consultation document for the implementation of AEOI in Hong Kong.
The following decisions were reached regarding the April AEOI proposal:
- The definitions of financial institutions (FIs), non-reporting FIs and exempted accounts will remain more or less intact.
- In the light of feedback, Hong Kong is inclined to provide a clear legal basis which at the same time allows FIs to pursue a “wider approach” to cover account holders with other tax residences.
- On the proposed penalties for FIs and employees, it is essential to put in place appropriate penalty provisions to provide for a sufficient deterrent effect to ensure effective implementation of the AEOI regime in Hong Kong.
Hong Kong expects to commence AEOI by the end of 2018.
