On March 12, 2019, the European Commission removed Hong Kong from the European Union’s watchlist on non-cooperative tax jurisdictions. The decision was welcomed by the Hong Kong Government. Hong Kong’s Secretary for Finance Services & Treasury, James Lau, stated that “the latest decision shows that Hong Kong’s compliance with international tax cooperation is recognized by the international community.”
In 2017-18, Hong Kong was placed on the watchlist and was required to meet relevant EU criteria with a 2018 deadline – to avoid getting blacklisted for non-compliance. Hong Kong’s removal from the list comes in light of a series of changes it has made to alter its tax environment and introduce greater financial transparency in accordance with these criteria.
The list defines three criteria for good governance:
- Transparency: Compliance with international standards on the automatic exchange of information and information exchange (AEOI) on request
- Fair tax competition: Adherence to the principles of the EU Code of Conduct or to the Organisation for Economic Co-operation and Development’s (OECD) Forum on Harmful Tax Practices
- Base erosion profit shifting (BEPS): Commitment to implementing the four minimum standards under the OECD BEPS project.
The list of non-cooperative jurisdictions drawn out by the EU was aimed at an international crackdown on tax avoidance and evasion by promoting a more uniform tax environment within the EU and across the world. For further information please feel free to contacts us at email@example.com / + 852 3552 9085.