Thursday, 3 November 2016

Hong Kong's Public Consultation on BEPS Implementation

A public consultation on the implementation of base erosion and profit shifting (BEPS) measures proposed by the OECD was launched by the Hong Kong government on 26 October 2016. 

The top priority in the package put forward by the OECD is to monitor the implementation of four minimum standards: countering harmful tax practices, preventing treaty abuse, imposing country-by-country (CbC) reporting requirements, and improving the cross-border dispute resolution regime.

"Hong Kong will need to revise our existing tax laws to meet the [minimum] requirements of the BEPS package. In formulating our implementation strategy, we need to ensure that our model meets the international standard without compromising our simple and low tax regime," said Secretary for Financial Services and the Treasury K C Chan. 

In that respect, the Government's consultation paper confirms that it will "draw up a pragmatic strategy to implement the international requirements."

Finally, the paper says "while no immediate action is required for other BEPS Actions, the Government will keep in view the pace of international developments, and draw up our response plan as appropriate."

Comments are due by 31 December 2016. It is anticipated the relevant amendment bill(s) will be introduced into the Legislative Council in mid-2017.

Transfer pricing and BEPS continue to hog the current business headlines. If you’re interested in learning about related developments from a Malaysian perspective, why not attend Day 2 of our Wolters Kluwer Budget Conference on the 22nd of November, where tax planning, transfer pricing and BEPS are key topics for discussion in our numerous sessions. See you there!

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