Worldwide tendency of tax information exchange comes to Hong Kong

16.04.2013

Worldwide tendency in sphere of auto exchanging tax information unites more and more countries nowadays. Another jurisdiction, which decides to change it`s legislation and add exchange of tax information is Hong Kong.

Hong Kong`s government prepared legislative proposal, which would be the basis for conducting agreements about exchanging of tax information. Now Hong Kong can exchange tax information only with countries, with which they have conducted agreements about avoiding double taxation. We should mention, that Hong Kong conducted agreements about avoiding double taxation with 25 countries, the latest agreements were conducted with Italy, Mexico (http://hbcomp.ru/about/news_and_mailings/news_jurisdictions/3632/), Liechtenstein, Portugal. However, Hong Kong’s government trying to satisfy world`s standards and hopes, that this proposed law will help them to speed up the process of conducting agreements about avoiding double taxation.

Based on: www.ird.gov.hk

Expert’s opinion

Hong Kong is on of the most progressive jurisdictions among countries, which uses tax planning and assets protection. Joining the countries which exchanges tax information is normal step from Hong Kong, which fits the worldwide trend.

Should we worry about this? Definitely not.

There are a lot of arguments, to prove this point of view, so here are two the most important arguments:

1. Subjects, who does business in legal and public way, pays taxes and minimizes them by using Hong Kong`s companies, shouldn`t worry.

2. Increasing exchanging of tax information increases amount of information for analysis in geometric progression! There is already a lot of information for analysis, and nobody can handle it. The information that already exists is enough for analysis and for control over taxation.

So, the only thing you should worry about is your own business, its legal protection and legality. The main purpose of such “exchanging of information” is instrument for corporate wars.

All in all, we suggest you to take more care about legal side of your business.

Yaroslav Lomakin ( Managing partner of “Honest&Bright” company)