23 January 2017, Hong Kong signed a competent authority agreement (CAA) with Korea with a view to commencing the automatic exchange of financial account information in tax matters (AEOI) in 2019. The two countries have been exchanging tax information upon request since 2016 when the Korea-Hong Kong tax treaty entered into force,
In order to exchange financial account information with another jurisdiction, Hong Kong needs to sign a CAA. The name of that jurisdiction will be added to the list of “reportable jurisdictions” in the Inland Revenue Ordinance (Cap. 112) by means of a Notice published in the Gazette. Financial institutions have to report financial account information of tax residents of that particular reportable jurisdiction to the Inland Revenue Department starting from the reporting year.
Hong Kong signed its first two CAAs with Japan and the UK in 2016. Both were gazetted on 28 October and came into force on 31 December, with a view to commencing AEOI in 2018.
Korea has signed CAAs with the US and Singapore, as well as the multilateral agreement on automatic exchange of financial account information. The Ministry of Strategy and Finance said it will work on CAAs with 45 countries in 2017, including the Netherlands, Belgium and Ireland, and is expected to add 31 countries in 2018.