On 07 Aug 2024, the HKMA proposed amendments to Schedule 17E of the Inland Revenue Ordinance to revise the lists of participating and reportable jurisdictions under Hong Kong's AEOI framework. The proposals will remove nine non-activated jurisdictions, add eleven new participating jurisdictions, and include three additional reportable jurisdictions (Ecuador, Oman, Thailand) with first reporting in 2026, effective 1 January 2025. The circular also reinforces AIs' compliance obligations and updated customer communication principles to ensure clarity and minimize customer burden.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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Legislative Amendments to AEOI Framework
On 07 Aug 2024, the Hong Kong Monetary Authority (HKMA) issued a circular proposing amendments to Schedule 17E of the Inland Revenue Ordinance (Cap. 112) to update the lists of participating and reportable jurisdictions under the Automatic Exchange of Financial Account Information (AEOI) regime. The proposals will amend existing regulations to remove nine jurisdictions that have not activated AEOI exchange relationships with Hong Kong and add eleven new participating jurisdictions, while expanding the list of reportable jurisdictions to include three additional jurisdictions (Ecuador, Oman, Thailand) with first reporting in 2026.
Key Changes to Jurisdiction Lists
The legislative amendments will remove Bahrain, Belize, Marshall Islands, Montserrat, Nauru, Niue, Saint Vincent and the Grenadines, Seychelles, and Trinidad and Tobago from the list of participating jurisdictions under Schedule 17E. Eleven jurisdictions (Azerbaijan, Ecuador, Jamaica, Kazakhstan, Kenya, Maldives, Nigeria, Oman, Pakistan, Peru, Thailand) will be added to the participating jurisdictions list. Additionally, Ecuador, Oman, and Thailand will be added to the reportable jurisdictions list, requiring financial institutions to commence data collection for tax residents of these jurisdictions from 1 January 2025 and file the first submission to the Inland Revenue Department in 2026. The amendments will take effect on 1 January 2025.
Compliance and Customer Communication Requirements
The circular reminds Authorized Institutions (AIs) that due diligence and reporting obligations under the IRO have been in place since 2016, and AIs must review the amended jurisdiction lists to ensure ongoing compliance. It also updates guidance on customer communications, superseding the HKMA's 11 October 2016 circular. AIs are required to adopt a balanced approach in communicating AEOI requirements to customers, minimising their burden while ensuring clarity on tax residence reporting obligations. Customer communications must comply with the Personal Data (Privacy) Ordinance (Cap. 486), and AIs must provide clear explanations addressing common customer concerns, such as why Hong Kong residents must provide information for foreign tax authorities and whether accounts will be reported to Hong Kong authorities.
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