Tax & Accounting Blog

Hong Kong Signs Bilateral Agreements on Exchange of CbC Reports

BEPS, Blog, Global Tax Planning, International Reporting & Compliance January 18, 2018

On January 15, 2018, the Hong Kong Inland Revenue Department (IRD) announced that it has signed a bilateral competent authority agreement (CAA) with France for the exchange of country-by-country (CbC) reports. Hong Kong has also signed CAAs on the exchange of CbC reports with Ireland, South Africa, and the U.K.

The IRD says Hong Kong is seeking additional bilateral CAAs with its tax treaty and tax information exchange agreement (TIEA) partners. 


Hong Kong is committed to the exchange of CbC reports with appropriate jurisdictions on a bilateral basis, and intends to conduct the automatic exchanges with all its tax treaty and TIEA partners.

Hong Kong says that it has no plans to enter into multilateral exchange agreements – such as the OECD’s Multilateral Convention on Mutual Administrative Assistance in Tax Matters – with other jurisdictions at this stage. Hong Kong is working on the enactment of the Inland Revenue (Amendment) (No. 5) Bill 2017 to properly join the foregoing OECD convention. 

When automatically exchanging CbC reports with other jurisdictions, Hong Kong intends to protect taxpayers’ privacy, as well as the confidentiality of information exchanged, and ensure the proper use of the exchanged information. In this regard, the relevant articles on exchange of information in tax treaties and TIEAs provide for safeguards, including the following:

  • Information exchanged should be foreseeably relevant.
  • Information received by Hong Kong’s partners should be treated as confidential.
  • Information will only be disclosed to the tax authorities, and not for release to their oversight bodies, unless there are legitimate reasons given by the tax treaty or TIEA partners (i.e., Hong Kong has committed to the Legislative Council that the inclusion of such oversight bodies must be positively listed).
  • Information exchanged should not be disclosed to a third jurisdiction.
  • No obligation to supply information under certain circumstances, for example, where the information would disclose any trade, business, industrial, commercial or professional secret or trade process, or which would be covered by legal professional privilege.
  • The use of information exchanged for other purposes (i.e., non-tax related) should be allowed, provided that such use is permitted under the laws of both contracting parties and the competent authority of the supplying party authorizes such use. It is a prerequisite that the exchange of information must first be conducted for tax purposes in accordance with the provisions of a relevant tax treaty or TIEA.
  • Not to accede to requests from Hong Kong’s treaty partners for tax examinations abroad (i.e., Hong Kong has not included such an article in its tax treaties or TIEAs).

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