Common reporting standard: an unprecedented time for improving tax transparency in Hong Kong

The levels of penalties are HK$10,000 for non-compliance and submission of incorrect returns.26 The levels of penalties are HK$10,000 with imprisonment for six months or HK$50,000 with imprisonment for three years for defrauding with intent.27 The latest development of Hong Kong's CRS AEOI framework is the gazettal of the Inland Revenue (Amendment) Ordinance 2018 on 2 February 2018.28 It enabled Hong Kong to adopt the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MCMAA)29 signed by Mainland China in Hong Kong30 and amended certain Hong Kong tax provisions on CRS AEOI so that they align with the international standard stipulated by the OECD.31 The MCMAA will further expand the CRS AEOI network in Hong Kong.32 Various matters relating to the implementation of the CRS AEOI in Hong Kong were discussed during the annual meeting between Hong Kong IRD and Hong Kong Institute of Certified Public Accountants held in April 2017. [...]taxpayers are strongly advised to perform health checks to assess their CRS AEOI risk and tax audit risk. 21 Sections 50C(3) and 50F, IRO. 22 To facilitate reporting FIs to fulfill their obligations to furnish CRS AEOI returns, Hong Kong IRD has developed a data schema in Extensible Markup Language (XML), which is based on the OECD's CRS XML Schema, specifying the data structure and format for reporting the required financial account information. 23 The CRS AEOI Portal facilitates reporting FIs: 1) to submit notifications for commencement/cessation of maintaining reporting accounts and change of address, 2) to file CRS AEOI returns, and 3) to receive/send messages in connection with the reporting of financial account information. See www. oecd.org/ctp/exchange-of-tax-¡nformat¡on/ convent¡on-on-mutual-adm¡n¡strat¡ve-ass¡stance-¡n-tax-matters.htm. 30 Mainland China signed the MCMAA on 27 August 2013, with entry into force on 1 February 2016. Since Hong Kong is not a sovereign state, Hong Kong could not be a signatory of the MCAA.