The Common Reporting Standard (CRS), is an international standard developed by the Organisation for Economic Co-operation and Development (OECD), designed to enhance tax transparency and improve tax compliance through a global automatic exchange of financial information between CRS-participating jurisdictions.
The Automatic Exchange of Financial Account Information (AEOI) is a new system that involves the transmission of financial account information (policy information if it is life insurance) from Hong Kong to an overseas tax jurisdiction with which Hong Kong has entered into an AEOI agreement (or known as an “AEOI partner”).
Under CRS, all financial institutions, including Prudential Hong Kong Limited, are required to identify customers who appear to have tax residency outside of Hong Kong, and report certain policy information to the Inland Revenue Department (IRD) of Hong Kong. IRD may then share the information with the tax authority where the customer is a tax resident.
In Hong Kong, all financial institutions, including Prudential Hong Kong Limited, are legally required to be compliant with the CRS.
Beginning 1 January 2017, Prudential will start to collect relevant information from account holders (for most of the cases in life insurance policy, it’s the policyholders, collateral assignee and beneficiary) for the purpose of AEOI.
Under CRS, we will be asking you for your name, Hong Kong identity card or passport number, address, date and place of birth, jurisdiction of residence, tax identification number, controlling person type (for business insurance if proposer/policyholder is an entity with one or more controlling person(s)), place of registration/incorporation, Hong Kong Business Registration Number, and entity type (for business insurance if proposer/policyholder is an entity).
Generally your tax residency is the jurisdiction where you are resident for tax purposes. Please contact a professional tax adviser or check the OECD website for more information on how to determine your tax residency.
This is a formal declaration that account holder (for most of the cases in life insurance policy, it’s the policyholders, collateral assignee and beneficiary) makes in connection with his/her tax residency.
As at 26 July 2016, more than 100 jurisdictions over the world have committed to the implementation of AEOI, you may check the list on OECD website.
If you would like to obtain more information on your tax residency and on CRS, you may contact your tax advisor or find out more at the IRD and OECD websites.
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