The Hong Kong government has launched a public consultation to gauge views on the implementation of the OECD’s anti-base erosion and profit shifting (BEPS) initiatives. Among the proposal is a measure for the adoption of a formal transfer pricing regime in Hong Kong, with mandatory documentation requirements.
Being an international financial centre and a responsible member of the international community, Hong Kong indicated to the OECD in June 2016 its commitment to the BEPS package and its consistent implementation. The commitment was premised on the condition that Hong Kong could put in place the necessary domestic legislation in a timely manner. Hong Kong is now an Associate in the inclusive framework established by the OECD for implementing the BEPS package.
Hong Kong will need to revise their existing tax laws to meet the requirements of the BEPS package. In formulating their implementation strategy, they need to ensure that their models meet the international standard without compromising their simple and low tax regime.
The implementation timetable for BEPS is very tight. To meet the OECD’s requirement, their current target is to introduce the relevant amendment bill or bills into the Legislative Council in mid-2017.
The consultation paper is available on the website of the Financial Service and the Treasury Bureau. Members of the public are welcome to send their views to the revenue division of the financial services and the treasury bureau by post or email. The two-month consultation will end on December 31, 2016.
