More than 1,700 financial institutions in Hong Kong have submitted the account details of their customers as part of an international effort to crack down on tax evasion.
While Hong Kong has submitted details on tax residents in 75 jurisdictions worldwide, it only has agreements with 50 of these jurisdictions, including mainland China, Singapore, Japan, and Canada, reported the South China Morning Post. As such, Hong Kong will only send information annually to those 50 tax authorities.
The first exchange will take place by end-September, and the remaining 25 jurisdictions will receive updates once agreements have been signed with Hong Kong, the report said. The city is part of the Automatic Exchange of Financial Account Information in Tax Matters (AEOI), a global tax cooperation initiative spanning 149 jurisdictions.
The Inland Revenue Department has collected information regarding bank account balances, income from insurance products, dividends paid, sales proceeds from financial assets and other income derived from financial trade.
Hong Kong’s well-developed financial markets have attracted investors from all over the world. The Securities and Futures Commission revealed that, in 2017, two-thirds of total assets under management in Hong Kong, or HK$15.92 billion (US$2 billion), were from non-Hong Kong sources.
Meanwhile, the Insurance Authority said that annual new premiums collected rose from HK$5.2 billion in 2007 to HK$72.7 billion (US$9 billion) in 2016, thanks to an influx of mainland Chinese investors.
Praveen Daswani, deputy chairman of the Hong Kong Federation of Insurers, welcomed the implementation of AEOI.
“[It] not only enhances Hong Kong’s status in the international arena, it also reinforces Hong Kong as being a robust and credible jurisdiction for investment,” he told SCMP. https://us.res.keymedia.com/files/image/iStock_business-meeting-committee-plans-executive-79752873_SMALL.jpg