The Legislative Council of the Hong Kong Special Administrative Region passed the third reading of the "Taxation (Amendment) (Automatic Exchange of Information) Bill 2026" on the 17th to optimize the administrative framework for automatic exchange of tax information in Hong Kong. The Hong Kong SAR government welcomes this.
The SAR government introduced that since 2018, Hong Kong has automatically exchanged tax related financial account information with partner tax jurisdictions annually in accordance with the common reporting standards established by the Organization for Economic Cooperation and Development (OECD), while ensuring data confidentiality and security. This helps relevant tax authorities assess their tax residents and assists in investigating and combating cross-border tax evasion.
In response to the opinions of the OECD on the implementation of the automatic exchange of tax information system in Hong Kong, the SAR government agrees that it is necessary to optimize the relevant administrative framework. New regulations will be implemented from January 1, 2027, including mandatory declaration of financial institution registration for the SAR government's tax bureau to strengthen identification, optimization of the requirement for financial institutions to keep due diligence records, and adjustment of penalties to enhance deterrence.
The Secretary for Financial Services and the Treasury of the Hong Kong Special Administrative Region Government, Xu Zhengyu, said that Hong Kong has always supported international efforts to enhance tax transparency and combat cross-border tax evasion. Optimizing the administrative framework for automatic exchange of tax information in response to the opinions of the OECD will help increase confidence in Hong Kong's tax system among other tax jurisdictions. This move is beneficial for Hong Kong to expand its comprehensive network of double taxation agreements, allowing Hong Kong enterprises to enjoy higher tax certainty and avoid double taxation when expanding their business overseas.
It is reported that in order to assist the industry in adapting to new regulations and improving tax clarity, the Taxation Bureau of the Special Administrative Region Government will issue relevant guidelines to provide technical support and answer inquiries to the industry. (Looking into the New Era)