Hong Kong has now legislation in place for implementing automatic exchange of financial account information (AEOI). The Department has to ensure that financial institutions comply with their obligations under the relevant legislation. Some reference materials on AEOI have been uploaded onto the Department’s website today to provide guidance for financial institutions and other relevant parties.
The Inland Revenue Department today issued the Departmental Interpretation and Practice Notes No. 52 (“Taxation of Corporate Treasury Activity”) which sets out the Department’s interpretation and practice in relation to the relevant provisions in the Inland Revenue (Amendment) (No. 2) Ordinance 2016. The Practice Note explains the conditions under which interest deduction claims could be allowed by virtue of section 16(2)(g) of the Inland Revenue Ordinance and how a corporate treasury centre can obtain the half rate concession under section 14D(1).
Tax obligations of property owners
(June 16, 2016)
Revised application forms for certificate of Hong Kong resident status in respect of the Comprehensive Arrangement for the Avoidance of Double Taxation between the Mainland and Hong Kong (“the Arrangement”) will apply as from 20 June 2016
To streamline the implementation of the Arrangement, the Mainland and Hong Kong exchanged notes on 16 March 2016 and 15 April 2016 agreeing and confirming the following administrative arrangement on certificate of Hong Kong resident status:
A Certificate of Resident Status issued by the Hong Kong competent authority to a Hong Kong resident for a particular calendar year serves as a proof of the Hong Kong resident status of the Hong Kong resident for that calendar year and the two succeeding calendar years. Where there are changes in the Hong Kong resident’s circumstances such that the conditions for enjoying tax benefits under the Arrangement are no longer met, such issued Certificate of Resident Status cannot serve as a proof of the Hong Kong resident status after the changes.
The above administrative arrangement is effective as from 15 April 2016, and applies to all Certificates of Resident Status issued by the Hong Kong competent authority in respect of the Arrangement, including those issued before 15 April 2016.
In connection with the above administration arrangement, any person applying for a certificate of Hong Kong resident status in respect of the Arrangement has to complete the following revised forms as from 20 June 2016:
IR1313A (06/2016) – for company, partnership, trust or other body of person
IR1314A (06/2016) – for individuals
Generally, for claiming tax benefits under the Arrangement in the Mainland, where a person has been issued with a certificate of Hong Kong resident status for a particular calendar year, it would not be necessary for the person to apply for certificate of Hong Kong resident status for the two succeeding calendar years.
The Inland Revenue Department has achieved all the targets, and exceeded many, in its performance pledges in 2015/16. The Performance Pledge Annual Report 2015/16 has been uploaded to the Department’s website.