INVESTIGATION AND TRIAL OF OFFENCES. INVESTIGATION OF OFFENCES.
AUTOMATIC EXCHANGE OF FINANCIAL ACCOUNT INFORMATION … · - Direct FI to rectify their AEOI system...
Transcript of AUTOMATIC EXCHANGE OF FINANCIAL ACCOUNT INFORMATION … · - Direct FI to rectify their AEOI system...
AUTOMATIC EXCHANGE
OF FINANCIAL ACCOUNT
INFORMATION (AEOI)
Candy Wong
Vice President, Client Services
Computershare Investor Services Limited
Welcome
House-keeping points
› Lines on mute
› Questions via instant messaging
› Questions will be answered at the end of presentation
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Agenda
1. OECD initiatives
2. Why Hong Kong
3. Who are affected
4. What are the obligations
5. What is the timetable
6. What is next
7. Questions & answers
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1. OECD
INITIATIVES
OECD initiatives
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What is AEOI? Why AEOI? What is Common
Reporting Standard (CRS)?
- A system involves the transmission of financial account information from Hong Kong to an overseas tax jurisdiction with which Hong Kong has entered into an AEOI agreement.
- Financial information only relates to the tax
residents of the jurisdiction of AEOI partners.
Hong Kong
An overseas AEOI partner
In July 2014, Organisation for Economic Co-operation and Development (OECD)
issued CRS and called jurisdictions to participate in AEOI. As at 9 May 2016, more than 100 jurisdictions over the world committed to the implementation of AEOI.
OECD initiatives
Q&A
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OECD initiatives
Q1: Do you know who are AEOI Partners of HK as at today?
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› IRD Press Release: http://www.ird.gov.hk/eng/ppr/archives/16102601.htm
Example:
Hong Kong
An overseas AEOI partner
Account Holder Mr. A - tax resident in Japan
Japan Tax Authority
HK IRD
HK Bank X
OCED initiatives
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What is AEOI? Why AEOI? What is Common
Reporting Standard (CRS)?
To exchange of information for tax purposes which can enhance tax transparency and combat cross-border tax evasion. It is similar to FATCA.
Enhance tax transparency Combat cross-border tax evasion
OCED initiatives
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What is AEOI? Why AEOI? What is Common
Reporting Standard (CRS)?
It refers to the Standard for Automatic Exchange of Financial Account Information issued by OECD to ensure consistency in exchange of financial account information.
2. WHY
HONG KONG?
Why Hong Kong › Members of the international community advocated AEOI as efficient mode
of international tax cooperation and have made it a new global standard.
› As a responsible international citizen and a leading financial centre, Hong
Kong indicated in September 2014 our commitment to implement AEOI and
commence the first information exchanges by the end of 2018.
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Why Hong Kong
AEOI Development in Hong Kong
April 2015
October 2015
January 2016
June 2016
The Inland Revenue
(Amendment) (No. 3) Ordinance
2016 (IRO) was affected for
implementation of AEOI
in Hong Kong
The Amendment Bill
was presented to
LegCo
HKSAR Government
issued consolidated
responses to the
consultation paper.
HKSAR Government
issued a consultation
paper on AEOI
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Why Hong Kong
Inland Revenue (Amendment) (No.3) Ordinance 2016 sets out mainly:
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Definition of
Reporting FI,
Returns by
Reporting FI
Excluded
Accounts (e.g.
retirement and
pension
account)
Non-reporting
FI (e.g.
Central Bank,
Government
Entity)
Reportable
Jurisdictions
Penalties for
offences (fine
and
imprisonment)
Due Diligence
Requirements
(pre-existing
accounts &
new accounts)
1 2 3
4 5 6
3. WHO ARE
AFFECTED?
Who are affected
Q&A
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Who are affected
A financial institution resident in Hong Kong is required to identify financial accounts held by tax residents in the AEOI partner jurisdictions.
Definition of financial institution under the IRO (briefly below)
Custodial institution: an entity that holds as a substantial
portion of its business, financial assets for the account of
another individual or entity.
Depository institution: an authorized institution as
defined by section 2(1) of the Banking Ordinance
(Cap.155) or an entity that accepts deposits in the
ordinary course of a banking business or similar business.
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Who are affected
Investment entity: includes but not limited to certain
corporations licensed under the Securities and Futures
Ordinance (SFO) to carry out certain regulated activities;
and collective investment schemes authorized under the
SFO.
Specified insurance company: includes but not
limited to an insurer authorized under the Insurance
Companies Ordinance (Cap.41).
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Who are affected
Definition of financial account under the IRO (briefly below)
** Please refer to the IRO for detailed definition of financial
institution and financial account.
› a custodial account
› a depository account
› any equity interest or debt interest in the
financial institution
› any cash value insurance contract and any
annuity contract
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4. WHAT ARE
THE
OBLIGATIONS?
What are the obligations The AEOI Process
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Step 1 Step 2
Step 3 Step 4
Step 5 Reporting Financial Institutions
Financial Accounts
Reportable Accounts
Due diligence procedures
Report the Relevant information
Review their
And then
By applying To identify
What are the obligations Identify who are…..
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“Tax residents of reportable jurisdictions” generally refers to those who are liable to tax by reason of residence in the jurisdictions with which Hong Kong has entered into an AEOI arrangement. IRD Guidance:
Tax residents of reportable jurisdictions
?
For individual, his physical presence or stay in a place (say, whether over 183 days within a tax year)
For company, place of incorporation or where management control entity lies
Depends on the tax law of the jurisdictions
For details of tax laws of different jurisdictions, please refer to OECD’s portal.
What are the obligations Due diligence and self-certification
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Pre-existing Accounts (HK$) New Accounts (HK$)
Low value accounts (≤$7.8 million)
- Electronic search
High value accounts (>$7.8million) - Electronic search, paper search
and RM enquiry Self-certification if necessary
Individual Accounts
Balance ≤$1.95million - Not subject to review
Balance >$1.95million - Electronic search, paper search
and RM enquiry
Self-certification if necessary
Entity Accounts
No threshold
Self-certification from all holders
Reasonable test on self-certification by FI (based on KYC/AML documents)
No threshold Self-certification from all holders Reasonable test on self-certification
by FI (based on KYC/AML documents)
What are the obligations Due diligence and self-certification
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Pre-existing Accounts (HK$) New Accounts (HK$)
No threshold
Self-certification from all holders
Reasonable test on self-certification by FI (based on KYC/AML documents)
Individual Accounts
No threshold Self-certification from all holders Reasonable test on self-certification
by FI (based on KYC/AML documents)
Entity Accounts
Low value accounts (≤$7.8 million)
- Electronic search
High value accounts (>$7.8million) - Electronic search, paper search
and RM enquiry Self-certification if necessary
Balance ≤$1.95million - Not subject to review
Balance >$1.95million - Electronic search, paper search
and RM enquiry
Self-certification if necessary
What are the obligations Due diligence and self-certification
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Self certification forms to whom? When to get the self certification forms?
Individual Entity Controlling persons of passive
non-financial entity
Upon account opening
In special circumstances, get it within 90 days after the account is opened.
What are the obligations Due diligence and self-certification
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Self certification forms should be……
Retention of documents…..
Signed and dated
Any change in tax residency, holders to inform the reporting FI within 30 days
6 years
What are the obligations Due diligence and self-certification
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Wider approach to collect information
FI can capture and maintain tax residence of tax holders irrespective of whether the account holder is a reportable person Benefits Cater for more AEOI Partners Enable FIs to collect more information in one-go
What are the obligations Reporting requirements
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Individual account holder/controlling persons
- Name
- Address
- Jurisdiction of tax residence
- Taxpayer identification number (TIN or equivalent)
- Date of birth
- Place of birth (Optional)
2017 onwards
In respect of Account details to be reported Year to 31 Dec
- Name
- Address
- Jurisdiction of tax residence
- TIN
Entity account holder
Account Number
Account balance or value
- Custodial accounts: Total gross amount of interest, dividends, proceeds from the sale or redemption of financial assets
- Depository accounts : Total gross amount of interest paid to account
- Other accounts: Total gross amount paid to account
What are the obligations
Q&A
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What are the obligations Terms and explanations
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- Collect information from FI - Access the operation system of FI - Direct FI to rectify their AEOI system - Issue search warrants Offences, e.g.
Sanctions
IRD Powers
?
- FIs who fail to make returns - FIs with intent to defraud, provide return which is misleading, false or inaccurate
in a material particular - Holders who provide incorrect returns
What are the obligations
Q&A
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What are the obligations Terms and explanations
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Offences
Sanctions
IRD Powers
Q6: If breach, penalties on whom? Answer: Penalties can be imposed on: - Reporting FI - Service Providers engaged to fulfill due diligence and reporting requirements - Employees or persons engage to work - Account Holders who provide false or incorrect in material particular
Fine and imprisonment
Fine A fine at Level 3 to 5 Imprisonment From 6 months to 3 years
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5. WHAT IS
THE
TIMETABLE?
What is the timetable
Date
2017 Due diligence procedures in place to collect relevant information
July 2017 Start of AEOI registration through IRD Portal
May 2018 Submission of AEOI returns
Sept 2018 First exchange with AEOI partners
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6. WHAT IS
NEXT?
What is next
Assess
• whether AEOI has impact on your company
Discuss
• with tax advisor if necessary
Plan
• ahead resources (manpower, training, IT support)
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What is next How can Computershare help?
Due diligence on accounts
Collect information from holders (self - certification form)
Compile reports for your reporting to IRD
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Useful information
Press Release – Inland Revenue (Amendment) (No. 3) Ordinance 2016 came into effect (30 June 2016)
http://www.ird.gov.hk/eng/ppr/archives/16063001.htm
Inland Revenue (Amendment) (No. 3) Ordinance 2016
http://www.gld.gov.hk/egazette/pdf/20162026/es12016202622.pdf
Frequently Asked Questions on AEOI
http://www.ird.gov.hk/eng/faq/dta_aeoi.htm
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THANK YOU!
Q & A
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questions and comments
using the Questions Panel.
This communications is for information only and not intended to be used as tax advice. It is not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer under the IRO.
以上資料僅供參考用途,而非作為稅務建議。此資料亦非納稅人用於逃避稅務局所要求之稅務罰款的依據。
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