Under the Hong Kong CRS reporting system, the following three pillars define the implementation
The reporting institutions
Under the Hong Kong CRS reporting system, the biggest role is bestowed on the reporting entities. Reporting entities are financial organizations that hold accounts of non-residents from jurisdictions that have already entered into CTDA and CAA with Hong Kong. The financial institutions must be an entity that is operating in Hong Kong or a branch of a non-resident institution. As advised by www.accoplus.net, The main reporting institutions include banks, insurance firms, investment entities, and custodial institutions.
The reportable accounts
To deliver their mandates appropriately, the CRS framework provides a clear definition of reportable accounts. These are financial accounts that are subject to assessment and their report submitted to IRD by close of 2017. These are accounts of non-residents that fall into the following categories;
(i) Depository accounts
(ii) Annuity contracts
(iii) Custodial account
(iv) Cash value insurance contracts
(v) Debentures and shares by financial organizations
Note that the reporting account is allowed to exempt any account that is held by a non-resident with low risk of evading tax. Besides, the account ceases to be reportable if the person shifts to Hong Kong permanently.
Conducting due diligence
Due diligence is brought out in the Section 17D of the new IRD law. The section appreciates the difficulties that institutions are likely to encounter trying to implement the CRS framework. It helps