Hong Kong: Six Nordic Tax Information Exchange Agreements


Hong Kong : Six Nordic TIEAs signed

In June 2014 we reported on the introduction of the legislative framework in Hong Kong to enable the jurisdiction to enter Tax Information Exchange Agreements (‘TIEA’) with other jurisdictions. Subsequently, Hong Kong  concluded negotiations with the United States for the mutual exchange of information to enable either jurisdiction to request information from the other for the assessment or enforcement of tax.

Following the TIEA agreed with the US, in August this year the Hong Kong authorities signed a further six TIEAs with Denmark, Norway, Sweden, Iceland, Greenland and the Faroes.

Each of the TIEAs is based on the OECD model and sets out the scope and mechanism for information to be exchanged. In brief, information will only be exchanged on receipt of a specific request for information on taxes specified within the TIEA concerned.

If Hong Kong receives a request and the information is not available within the records of the HK Inland Revenue Service, the Commissioner has the authority to obtain the information from the taxpayer or third party. The TIEA does not permit a party to the Agreement to conduct a tax investigation in the other party’s jurisdiction.

The period covered in any request for information may be any period on or after ratification and the entry into force of the TIEA. The TIEA will need to be ratified by Hong Kong and each of the Nordic countries respectively and we expect the process to be complete in the near future.

Each of the TIEA incorporates, what are described by the Hong Kong authorities as ‘highly prudent safeguard measures to protect taxpayers’ privacy and the confidentiality of information exchanged’. We understand that the safeguards are those provided under Hong Kong law which includes a notification and review system, under which the taxpayer is notified of the nature of the request and can review the information exchanged. Plus further safeguards as are present under a comprehensive avoidance of double taxation agreement (CDTA).

The Secretary for Financial Services and the Treasury of Hong Kong announcing the signing of the TIEAs added that the measures taken by Hong Kong demonstrated the jurisdiction’s commitment to promote tax transparency in accordance with its international commitments and best practise. It will continue to expand its network of double taxation agreements with its trading and investment partners throughout the world.