HONG KONG: Hong Kong has agreed to an automatic exchange of information with South Africa and Portugal amid mounting pressure from the OECD and the European Union. The agreement means Hong Kong tax authorities will have to provide South Africa and Portugal with personal information on taxpayers such as name and address, country of tax residence and tax identification number. The information will also include investment income taxpayers earned over the year, such as interest, dividends, income from certain insurance contracts and annuities. Account balances are also reported, as are gross proceeds from the sale of financial assets. It is the latest data-sharing agreement signed by Hong Kong after striking a similar deal last month with six other jurisdictions -Belgium, Canada, Guernsey, Italy, Mexico, and the Netherlands.
The deal brings the number of automatic exchange of information (AEOI) deals signed by the special administrative region to 11, having previously agreed to share such data with the UK and Japan. It comes as Hong Kong has repeatedly faced threats from the Organisation for Economic Co-operation and Development (OECD) and the EU that it will be blacklisted unless it adopts the Common Reporting Standard (CRS), requiring the city-state to provide information on foreign account holders to their home countries on an annual basis.
Hong Kong’s Inland Revenue Department expects to begin exchanging data by 2018, subject to implementing domestic legislation later this year. “We have been seeking to expand Hong Kong’s automatic exchange of information (AEOI) network with our tax treaty partners. The signing of agreements with Portugal and South Africa, bringing up the number of Hong Kong’s AEOI partners to a total of 11…signifies the government’s efforts in this drive,” a spokesperson for the tax office said earlier this week. Meanwhile, the agreement comes at a critical time for South Africa as the government recently announced it plans to force South Africans working in non-income tax jurisdictions, such as the UAE, Hong Kong and Mauritius to pay income tax in South Africa.
