Hong Kong – FATCA
Hong Kong and the US have largely concluded negotiating an Inter-Governmental Agreement (IGA) that will enable compliance by Hong Kong financial institutions with their obligations under FATCA. It is expected that later this year the FATCA Model 2 IGA will be signed.
Under this agreement HK financial institutions will then need to register and enter an agreement with the US Inland Revenue Service. The agreement will require the institution to report account information of customers who are US taxpayers, subject to the institution obtaining the prior consent of the client. The information will be provided annually.
The Model 2 IGA will be supplemented by a tax information exchange agreement (TIEA) as agreed in March this year, update below.
Hong Kong – US Information Exchange
In July 2013 Hong Kong introduced legislation to enable the jurisdiction to enter into tax information exchange agreements (TIEA) with other countries. Since then the first TIEA has been negotiated with the US for the mutual exchange of information between the Hong Kong Inland Revenue Department and the IRS in the US. Under the Agreement either jurisdiction can request information on the assessment or enforcement of tax from the other.
Following the conclusion of this TIEA (signed in March this year*), the Hong Kong Inland Revenue Ordinance has been published in the Gazette and thus implements the Order for the exchange of information. We expect to see the first requests being made in the near future.
*See our news bulletin dated 29 March for more information.
Other FATCA news
Liechtenstein is the latest European jurisdiction to have signed an Intergovernmental Agreement (IGA) with the US to enable compliance with the obligations imposed under FACTA. The form of the agreement follows the Model 1 reciprocal exchange of information between the two jurisdictions.
It is anticipated that the Liechtenstein government will now introduce legislation for the implementation of FACTA later this year.
In the same week as Liechtenstein signed its IGA, Gibraltar also joined the club of jurisdictions with signed IGA’s with the US. Legislation will follow shortly.