Illustrations for Automatic Exchange of Information (“AEOI”) in Hong Kong
As the Hong Kong Inland Revenue Department has already implemented the local Common Reporting Standard (“CRS”) in 2017 with the first automatic information exchanges to be made by the end of 2018, the following illustrations provide general views what financial account information will be exchanged among the reportable jurisdictions for different Entities under the AEOI regime:
Notes:
- A Passive Non-Financial Entity (“NFE”) is an NFE that is not an Active NFE.
- The definition of Active NFE essentially excludes Entities that primarily receive passive income or primarily hold amounts of assets that produce passive income (such as dividends, interest, rents etc.), and includes entities that are publicly traded (or related to a publicly traded Entity), Governmental Entities, International Organizations, Central Banks, or a holding NFEs of nonfinancial groups. An exception to this is an Investment Entity that is not a Participating Jurisdiction Financial Institution, which is always treated as a Passive NFE.
- A Controlling Person is a natural person who exercises control over an Entity. Where that Entity is treated as a Passive NFE then a Financial Institution must determine whether such Controlling Persons are Reportable Persons.
- The financial account information to be exchanged includes personal data of controlling person such as name, address, jurisdiction of residence, Taxpayer Identification Number (“TIN”), and the date and place of birth while financial account data such as the account number, account balance or value (year-end), and the gross amount of interests, dividends and sale proceeds of financial assets as appropriate for the year concerned.
Should you require further details or assistance on the above, please contact Sylvester Chu at tax@zetland.biz.
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