Hong Kong Adapts To Global Tax Developments
Hong Kong’s Secretary for Financial Services and the Treasury, K C Chan, has emphasized that the Government is committed to complying with the latest international tax developments, including on tax transparency and tackling base erosion and profit shifting.
In his speech to the Taxation Institute of Hong Kong 2015 CTA Conference on November 20, he said: “For Hong Kong, as an international financial center, we can ill afford not to adapt to the rapidly evolving situation and catch up with the latest global developments.”
One of the major initiatives that the Government is currently addressing is the implementation of the international standard on the automatic exchange of financial account information in tax matters. Hong Kong has committed to commence the first automatic information exchanges by the end of 2018, providing the necessary domestic legislation is in place by 2017.
“With such a tight timetable, we have already conducted a round of consultation from April to June this year,” Chan said. “We are finalizing our legislative proposals, taking into account the views and suggestions received, and aim to introduce the bill to the Legislative Council in early 2016. We look forward to the timely and smooth passage of the bill.”
In addition, with regard to the OECD’s Base Erosion and Profit Shifting project, he confirmed that “the Government has already started to analyze issues relevant to Hong Kong and to map out our priorities. We are keeping a close eye on new developments to make sure that our tax regime can catch up with global trends, and we will engage with stakeholders and prepare legislation where appropriate.”
However, he also confirmed that, “as we take forward the matter, we will not compromise our commitment to a simple and low-tax regime, a cornerstone of Hong Kong’s success and competitiveness.”
“We have to make timely and appropriate amendments to our tax law, so as to bring it up to meeting the various new requirements,” he noted. “In so doing, we would also need to be mindful of not causing an unnecessary compliance burden on our taxpayers.”
