Published on 16.10.2014
Hong Kong Tax - Exchange of Information
Hong Kong, as a responsible member of the international community, is committed to enhancing tax transparency and preventing tax evasion. There are two types of exchange of information instruments: the exchange of information article incorporated in the Comprehensive Double Taxation Agreements / Arrangement (DTAs) and Tax Information Exchange Agreements (TIEAs).
Hong Kong's treaty partners may make a request for exchange of information to the Hong Kong competent authority under the Exchange of Information article in the DTAs or TIEAs.
Mechanism to Exchange Information
Under the current mechanism, Hong Kong will:
- supply information upon receipt of a specific request from the competent authority of a treaty partner;
- authorise the exchange of information in relation to taxes covered by the DTA / TIEA;
- disclose information which relates to a period after the DTA / TIEA came into operation;
- give prior notification to the subject person before the information is exchanged unless exceptional circumstances exist; and
- endeavour to furnish a reply to the treaty partner within 90 days after receipt of a request for exchange of information.
The subject person concerned will have the right to request a copy of the information and to amend factual errors. The person can appeal to the Financial Secretary if the amendment request is refused by the Commissioner of Inland Revenue.
Request by Treaty Partner
The Hong Kong competent authority is the Commissioner of Inland Revenue or his authorised representatives. The treaty partner should provide in a request for exchange of information all the relevant facts including the particulars in Annex of Departmental Interpretation and Practice Notes No. 47 - Exchange of Information.
Hong Kong and the US 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 the free exchange of tax information on request between Hong Kong and the US. The HK-US TIEA will provide the necessary legal basis for Hong Kong to provide, upon request by the US, certain information that needs to be reported by financial institutions in Hong Kong to the US under the Foreign Account Tax Compliance Act (FATCA), which will be effective from 1 July 2014
Pursuant to the first TIEA signed with the US in March 2014, Hong Kong signed another six TIEAs on August 22, 2014, all with Nordic jurisdictions, i.e. Denmark, the Faroes, Greenland, Iceland, Norway, and Sweden.