The Hong Kong government introduced the Inland Revenue (Amendment) (No. 3) Bill 2017 to the Legislative Council in March this year and passed on 7 June 2017, seeking to expand the list of "reportable jurisdictions" (from the existing 2 jurisdictions to 75 jurisdictions), so that the automatic exchange of financial account information (“AEOI”) arrangement can have more effective implementation.
Following the amendment to the Hong Kong tax laws, a financial institution in Hong Kong will be required to conduct due diligence procedures and collect the required information from account holders who are tax residents of both prospective and confirmed AEOI partners of Hong Kong, and to furnish the Inland Revenue Department (“IRD”) with the relevant information collected. This is to enable the IRD to maintain the financial account information from the second half of 2017 for future exchanges with other jurisdictions. Therefore, companies should expect to see more due diligence procedures from banks in the near future.