Now, the outside world is focusing on China will be how to deal with "foreign account tax compliance law" provisions.
The United States tax agency range has been officially expanded to Hongkong. Present problem is, Chinese whether other regions will also be covered.
As a special administrative region of Hongkong China, Tuesday and USA signed an agreement, will share the work in Hongkong or has assets of Americans in Hongkong tax information. This is the government of the United States in the global fight against tax evasion and tried to save one of the efforts is expected to billions of dollars in revenue loss.
This information sharing agreement content is very strict, when tax authorities a request to obtain the tax information of the other party to a person, the two sides need to exchange documents. Because Hongkong does not require living overseas citizens to pay taxes, so this information between Hongkong and the United States share may become one-way trade.
More important, the agreement may be indicative of an intergovernmental agreement will be reached, thereby enabling the United States according to the "foreign account tax compliance with the law" (Foreign Account Tax Compliance Act, referred to as FATCA) to take enforcement action in Hongkong. The agreement is reached, the U.S. government will require financial institutions to the disclosure of the citizens of the United States open an account.
Originally expected in January this year the entry into force of the FATCA regulation, all living in the United States outside of the United States citizens and green card holders should have bank accounts and financial information disclosure. This provision has triggered strong resistance, many in the Asian Americans unwilling to endure complicated to declare the work and bear the additional tax burden, have to give up U. s.citizenship or green card. At the same time, many private banks in Hongkong have begun to refuse to open an account for American citizens or green card holders, the reason is that the tax related paperwork cost is too high.
Notwithstanding the provisions of FATCA has been prepared for a number of years, the formal implementation date has been postponed to July 1st this year, in part because many countries have not yet signed with the provisions of the agreement. In Asia, only Japan and USA signed the agreement between the government, said it would fully comply with the provisions of FATCA. Hongkong said Tuesday that the relevant agreement are.
Now, outside the focus of attention are focused on China, and how other parts of China will handle the FATCA regulations.
KPMG LLP (KPMG) in Hongkong, a tax partner Gan Zhaonian (Charles Kinsley) said that the widely expected that China will sign the agreement. He said that China has many financial institutions in the study of the FATCA project. (Note: China rich investors hope to get America green card.)
If a country does not sign the agreement, what risk? If not signed, then the country's banks will be a headache. America said earlier, for financial institutions that have not signed the FATCA agreement countries, any of its business and USA related will be charged a 30% withholding tax. For this reason, many banks and other financial institutions want their government to sign the agreement.
Gan Zhaonian spoke in Hongkong Tuesday the government statement said, to Hongkong for financial institutions, this is a good thing.
So for those of us in order to escape the State Tax Bureau (IRS) and the money deposited in overseas bank accounts of the Americans? Gan Zhaonian said that they will withstand the pressure; banking secrecy has become the past tense.