On 22 December 2016, the Inland Revenue Department published on its website an announcement on country-by-country (CbC) reporting. The announcement provides information on:
In respect of the transitional arrangement, the announcement states the following: Some tax jurisdictions have introduced CbC reporting since the accounting period commencing on 1 January 2016. To facilitate MNE (multinational enterprise) groups of which the ultimate parent entities are tax residents in Hong Kong (Hong Kong MNE Groups) to fulfil their CbC reporting obligations in those jurisdictions, the Department is prepared to accommodate parent surrogate filing as a transitional arrangement.
Under this transitional arrangement, a Hong Kong MNE Group will be allowed to file its CbC reports for the accounting periods commencing between 1 January 2016 and 31 December 2017 to the Department for exchange with other tax jurisdictions. Parent surrogate filing is entirely voluntary and may relieve the group's constituent entities from local filing obligations provided that:
The Department is now formulating the procedures for the arrangement which will be rolled out in the first quarter of 2017. Meanwhile, the ultimate parent entity of Hong Kong MNE Group seeking parent surrogate filing in Hong Kong should submit a notification, duly signed by its director, secretary or responsible officer, to the Department containing the following information:
The notification should be submitted by post to:
Chief Assessor (Tax Treaty)
G.P.O. Box No. 10856
(Re: Country-by-country reporting)
The notification in the form of an electronic record may also be sent by email to firstname.lastname@example.org. Hong Kong MNE Groups should take note that the transitional arrangement may not relieve their obligations in all jurisdictions since local filing requirements could vary in different jurisdictions.
The full text of the announcement can be found at: http://www.ird.gov.hk/eng/tax/dta_cbc.htm.