The Hong Kong State Tax Authority published in February 2018 a law creating the legal framework for joining a multilateral tax agreement. This reduces the risk that the EU will mark Hong Kong as a non-cooperative tax jurisdiction.
A law published on 2 February 2018 in the Official Journal provides the legal basis for the accession of Hong Kong to a multilateral tax agreement. It aims to implement:
- Automatic Exchange of Tax Information (AEOI abbreviated)
- Automatic Country-by-Country Reporting (“Country-by-Country Reporting”)
- Spontaneous exchange of information on binding assessments
Hong Kong has so far exchanged information only on the basis of bilateral agreements with individual states. The Convention on Mutual Administrative Assistance in Tax Matters should replace and unify these relations.
Offshore companies in Hong Kong
Jurisdiction with 0% tax for foreign transactions records international trade and tax planning. Setting up an offshore company in Hong Kong is worth doing, for example, for brokerage. It increases the image of the company in relation to China.
Hong Kong will honor commitments to EU tax cuts
A new law permitting the implementation of automatic exchange of information in tax matters will ensure that EU conditions are met within a set of anti-avoidance measures – the so-called anti-BEPS regulation. Collaboration with the EU countries should, therefore, remain seamless.