The last ten years have seen significant developments in the way supranational organisations and countries have been collaborating to achieve greater transparency in respect of the tax compliance of their residents.
The global focus by governments on maximising tax revenues has resulted in a co-ordinated effort to achieve greater transparency in respect of assets which residents are holding offshore, and verifying that the income and gains generated on the assets have been correctly assessed to tax. This is complemented by an increased emphasis on civil and corporate deterrents in respect of those deemed to have been evading tax or enabling tax evasion.
There are currently a plethora of information sharing arrangements which are either in place or are in the process of being implemented which assist governments with this aim. Different transparency regimes may apply depending on the jurisdiction in which the asset is located and the residence of the respective parties. For individuals holding assets in multiple locations, it is also possible that they will be subject to reporting under more than one regime.
HSBC is committed to ensuring that it is fully compliant with its obligations under the respective transparency regimes.
How the tax transparency regimes may impact clients
We appreciate that it can be difficult for investors to keep up to date with their obligations under the various regimes. The document attached in the link below has been prepared to provide an overview of the key aspects of the main regimes, and to explain why HSBC has been contacting its clients for additional information in respect of the assets which clients hold with us.
In addition to the attached document, if you would like more specific guidance in respect of the operation of the Foreign Account Tax Compliance Act (FATCA) or the Common Reporting Standard (CRS), please visit our dedicated webpages for more information in respect of these regimes.
How to use these guidance documents
The information in this document is based on our knowledge of current tax legislation as at June 2016 and is not exhaustive. Also please remember that tax rules may change in the future and depend on individual circumstances. Clients should contact their Private Bank team for more information of the actions they are required to take in respect of financial accounts and assets subject to the respective regimes.
HSBC does not provide any tax advice and this document is not intended to and shall not be construed as tax advice. We recommend that you carefully review your tax affairs to ensure that these are correct and up to date, and consult your tax advisor if required.