CRS Reporting in Hong Kong: Deadlines, Exemptions, and Penalties

Key Facts: CRS Reporting in Hong Kong 2025

Annual Reporting Deadline: May 31, 2025 (for 2024 calendar year account information)
Legal Framework: Inland Revenue (Amendment) (No. 3) Ordinance 2016 (effective January 1, 2017)
Reportable Jurisdictions: Over 80 active exchange relationships (126 total jurisdictions designated)
First Information Exchange: September 2018 (for 2017 calendar year data)
Penalties Range: HK$10,000 to HK$1,000,000 plus potential imprisonment
Self-Certification Deadline: Within 30 days of change in tax residency status
Submission Portal: IRD Automatic Exchange of Financial Account Information (AEOI) Portal
Regulatory Authority: Hong Kong Inland Revenue Department (IRD)

CRS Fundamentals for Hong Kong Entities

The Common Reporting Standard (CRS), a global initiative developed by the Organisation for Economic Co-operation and Development (OECD), promotes international tax transparency and combats tax evasion through the Automatic Exchange of Financial Account Information (AEOI) between participating jurisdictions.

Hong Kong implemented CRS through the Inland Revenue (Amendment) (No. 3) Ordinance 2016, enacted on June 30, 2016, establishing a comprehensive legal framework effective from January 1, 2017. The first exchange of information occurred in September 2018, covering financial account data for the 2017 calendar year.

What is CRS?

Under the CRS framework, financial institutions in Hong Kong are legally required to:

Identify accounts held by tax residents of reportable jurisdictions
Collect specified information on these reportable accounts
Report annually to the Hong Kong Inland Revenue Department (IRD)
Maintain due diligence procedures to verify account holder tax residency status

The IRD then automatically exchanges this financial account information with tax authorities in participating jurisdictions, creating a global network of tax transparency.

Who Must Comply?

All financial institutions operating in Hong Kong (except those specifically exempted) must comply with CRS requirements. This includes:

Banks and deposit-taking institutions
Investment entities and fund management companies
Custodial institutions holding financial assets
Specified insurance companies offering cash value products
Trusts and certain trust service providers

Important Note: Accounts held by individuals or entities who are solely tax resident in Hong Kong are generally NOT considered “Reportable Accounts” for CRS purposes. Hong Kong taxpayers who are not tax residents of any territory outside Hong Kong will not be reported.

CRS Reporting Deadlines in Hong Kong

Annual Reporting Deadline: May 31

All financial institutions subject to CRS obligations must submit their annual CRS reports to the IRD by May 31 following the calendar year in question. For 2025, this means:

Reporting Period	Deadline	Information Covered
Calendar Year 2024	May 31, 2025	All reportable account information for January 1 – December 31, 2024
Calendar Year 2025	May 31, 2026	All reportable account information for January 1 – December 31, 2025
Calendar Year 2026	May 31, 2027	All reportable account information for January 1 – December 31, 2026

Submission Process and Timeline

Financial institutions receive electronic notices from the IRD in January each year via the AEOI Portal, requiring submission of Financial Account Information Returns within 5 months (by May 31). The standard submission process follows this timeline:

January: IRD issues electronic notices to reporting financial institutions
January – May: Financial institutions aggregate and prepare account data from the preceding calendar year
By May 31: Electronic submission of returns via the AEOI Portal
June – August: IRD processes submissions and prepares for international exchange
September: Information exchange with partner jurisdictions occurs

What Information Must Be Reported?

Financial institutions must report the following information for each reportable account:

Account holder details: Name, address, jurisdiction(s) of tax residence, Tax Identification Number(s)
Account information: Account number, account balance or value as of December 31
Financial data: Total gross amounts paid or credited to the account during the calendar year (interest, dividends, other income)
Controlling persons: For passive non-financial entities, details of controlling persons who are tax residents of reportable jurisdictions
Sale proceeds: Gross proceeds from the sale or redemption of financial assets

Reportable Jurisdictions

Hong Kong maintains an official list of reportable jurisdictions specified in Part 1 of Schedule 17E to the Inland Revenue Ordinance. As of 2025:

126 jurisdictions are designated as reportable jurisdictions
Over 80 active exchange relationships for CRS purposes based on bilateral or multilateral competent authority agreements
The list continues to expand as Hong Kong activates additional exchange relationships

Accessing the Official List

The complete and current list of reportable jurisdictions is maintained on the IRD’s official webpage. Financial institutions and individuals can access the authoritative list at:

Official IRD Reportable Jurisdictions List:

www.ird.gov.hk/eng/tax/aeoi/rpt_jur.htm

This list is periodically updated as Hong Kong enters into new AEOI agreements with additional jurisdictions. Financial institutions should regularly consult this official source to ensure compliance.

Key Reportable Jurisdictions Include:

Major jurisdictions with active CRS exchange relationships with Hong Kong include:

European Union member states (Germany, France, Italy, Spain, Netherlands, etc.)
United Kingdom and Crown Dependencies
Singapore, Japan, South Korea, India
Canada, Australia, New Zealand
Switzerland, Liechtenstein, Monaco
British Virgin Islands, Cayman Islands, Jersey, Guernsey
South Africa, Mauritius, Seychelles

Note: Hong Kong SAR itself is NOT a reportable jurisdiction. Mainland China has separate reporting arrangements. The United States is not on the CRS list but has a separate FATCA (Foreign Account Tax Compliance Act) reporting regime.

Due Diligence Requirements

Financial institutions must implement comprehensive due diligence procedures to identify reportable accounts and collect necessary information. These requirements are set out in the Inland Revenue Ordinance (Cap. 112) and must be consistent with OECD guidance.

New Account Procedures (Accounts Opened On or After January 1, 2017)

For all new accounts, financial institutions must:

Obtain self-certification: Collect a self-certification form from the account holder at account opening
Determine tax residency: Identify the account holder’s jurisdiction(s) of tax residence based on the self-certification
Verify information: Confirm the reasonableness of the self-certification based on information obtained during account opening
Collect TIN: Obtain the Tax Identification Number (TIN) for each reportable jurisdiction

Pre-Existing Account Procedures (Accounts Opened Before January 1, 2017)

For pre-existing accounts, financial institutions must conduct reviews based on account value thresholds and apply different procedures for:

Lower value individual accounts: Electronic record search for indicia of foreign tax residence
High value individual accounts: Enhanced review including paper record search and relationship manager inquiry
Entity accounts: Risk-based approach to identify passive non-financial entities with controlling persons who are tax residents of reportable jurisdictions

Where doubts exist about tax residence for pre-existing accounts, financial institutions may request a self-certification from the account holder to verify their tax residence status.

Self-Certification Requirements

Self-certifications are a cornerstone of CRS due diligence. Each reporting financial institution can design its own self-certification form, but must ensure all required data elements are collected:

Account Holder Type	Required Information
Individuals	Name, address, jurisdiction(s) of tax residence, TIN(s), date of birth
Entities	Name, address, jurisdiction(s) of tax residence, TIN(s), entity classification (financial institution or NFE)
Passive NFEs	Entity information PLUS details of all controlling persons (name, address, jurisdiction(s) of tax residence, TIN(s), date of birth)

Updating Self-Certifications

Account holders must provide financial institutions with an updated self-certification within 30 days of any change in their tax residency status or that of their controlling persons (for entities). Financial institutions will also request new self-certifications when:

Account holder information changes (e.g., change of address to a different jurisdiction)
The institution has reason to believe the previous self-certification is incorrect or unreliable
There is a change in circumstances that affects the reportable status of the account

Verification and Documentation

Financial institutions are required by law to verify the details provided in self-certifications. This may include:

Requesting a copy of passport to verify identity
Obtaining evidence of tax residency (e.g., tax residency certificate)
Reviewing documentary evidence supporting the declared tax residence
Confirming TINs against official databases where available

Exemptions and Excluded Entities

Accounts Not Subject to Reporting

Certain accounts and entities are excluded from CRS reporting requirements:

Hong Kong-only residents: Accounts held by individuals or entities solely tax resident in Hong Kong
Government entities: Accounts held by Hong Kong government bodies and entities wholly owned by the government
International organizations: Accounts held by recognized international organizations and central banks
Retirement and pension funds: Certain qualifying retirement schemes meeting specific criteria
Low-risk excluded accounts: Specific account types deemed to pose low risk of tax evasion

Active vs. Passive Non-Financial Entities (NFEs)

Non-Financial Entities (NFEs) are classified as either active or passive, with different reporting requirements:

Active NFEs (Generally NOT Reportable):

Less than 50% of gross income is passive income AND less than 50% of assets produce passive income
Publicly traded corporations and related entities
Government entities, international organizations
Non-profit organizations (charitable, religious, scientific, educational purposes) exempt from income tax
Holding companies that are members of non-financial groups
Start-up companies (within first 24 months)
Entities in liquidation or bankruptcy

Passive NFEs (REPORTABLE if controlling persons are tax residents of reportable jurisdictions):

Investment holding companies with predominantly passive income
Entities primarily receiving dividends, interest, rents, royalties
Any NFE that does not meet the criteria to be an Active NFE

Exempt Financial Institutions

Certain financial institutions may be exempt from reporting obligations, including:

Retirement funds meeting specific regulatory requirements
Certain investment entities wholly owned by exempt beneficial owners
Low-risk financial institutions as specified in the legislation

Penalties for Non-Compliance

The Hong Kong Inland Revenue Department rigorously enforces CRS compliance. Penalties for non-compliance are specified in Sections 80B to 80F of the Inland Revenue Ordinance and can be substantial, ranging from administrative fines to criminal prosecution with imprisonment.

Three Categories of CRS Offences

The IRD has established three main categories of penalties to sanction non-compliance:

Offence Category	Description	Penalty
1. Non-Compliance (Section 80B)	• Failure to comply with IRD notices • Failure to submit returns by deadline • Obstructing IRD assessors • Non-compliance with due diligence requirements	Fine at Level 3: HK$10,000 Plus HK$500 per day for continuing offence after conviction
2. Incorrect Returns (Section 80B(6)-(7))	• Providing misleading, false, or inaccurate information in returns • Knowing the information is false • Being reckless about accuracy • Having no reasonable ground to believe information is accurate	Minor/Administrative: HK$10,000 Serious/Systematic: up to HK$1,000,000
3. Fraud with Intent (Section 80B(8)-(9))	• Deliberately providing false information with intent to defraud • Intentionally omitting reportable accounts • Actively concealing relevant data to evade reporting • Willful failure to comply with CRS obligations	Criminal Prosecution: • Fine at Level 5: HK$50,000 or up to HK$1,000,000+ • Imprisonment for 6 months to 3 years

Specific Penalty Provisions

Section 80B(1) – Failure to Comply with IRD Notices:

Penalty: Fine at Level 3 (HK$10,000)
Court may order compliance within specified timeframe
Continuing offence: Additional HK$500 per day after conviction
Note: Engaging a service provider does not constitute a reasonable excuse for non-compliance

Section 80(2E)-(2F) – False Self-Certification by Account Holders:

Applies to account holders (not just financial institutions)
Offence: Knowingly or recklessly making false, misleading, or incorrect statements in self-certifications
Penalty: Fine at Level 3 (HK$10,000)

Administrative vs. Criminal Penalties

Administrative Penalties (HK$10,000 – HK$50,000):

Minor administrative lapses
First-time non-compliance without aggravating factors
Late submissions without material errors
Procedural failures corrected upon notice

Serious Penalties (HK$50,000 – HK$1,000,000+):

Systemic failures in due diligence procedures
Widespread errors in reported data
Persistent disregard for compliance frameworks
Repeated violations after warnings

Criminal Liability (Fines + Imprisonment):

Deliberate intent to defraud or evade reporting
Intentional omission of reportable accounts
Provision of materially false information with knowledge of its falsity
Active concealment of relevant data
Conspiracy to evade CRS obligations

Consequences: Fines exceeding HK$1,000,000 PLUS imprisonment for 6 months to 3 years

Hong Kong Penalty Levels Reference

Penalty Level	Fine Amount	CRS Application
Level 3	HK$10,000	Non-compliance, administrative failures, false self-certification
Level 5	HK$50,000	Fraud with intent (may be exceeded based on severity)

IRD Enforcement Approach

The IRD takes a risk-based approach to compliance monitoring, conducting:

Desk-based reviews: Analysis of submitted returns for completeness and accuracy
On-site reviews: Physical inspections of financial institutions’ CRS procedures and controls
Thematic reviews: Industry-wide examinations of specific compliance issues

The Department seeks to minimize compliance costs for financial institutions while ensuring robust adherence to CRS requirements. However, violations are taken seriously, and penalties are applied consistently to maintain the integrity of the global tax transparency framework.

Compliance Best Practices

For Financial Institutions

To ensure CRS compliance and avoid penalties, financial institutions should:

Establish written policies and procedures: Document how the institution meets all CRS obligations with clear, comprehensive procedures
Implement robust onboarding processes: Collect and verify self-certification documents at account opening for all new accounts
Conduct ongoing monitoring: Regularly review accounts for changes in circumstances requiring updated self-certifications
Maintain adequate systems: Invest in technology capable of identifying reportable accounts and aggregating required data
Train staff thoroughly: Ensure all relevant personnel understand CRS requirements and their responsibilities
Perform internal audits: Regularly test compliance procedures and remediate identified deficiencies
Engage professional advisors: Consult tax and legal experts for complex classification issues
Monitor IRD guidance: Stay updated on regulatory changes and interpretations
Submit returns timely: Ensure all returns are submitted by May 31 deadline with complete and accurate information
Respond promptly to IRD inquiries: Address any questions or notices from the IRD within required timeframes

For Account Holders

Individuals and entities holding accounts with Hong Kong financial institutions should:

Complete self-certifications accurately: Provide truthful and complete information about tax residency status
Understand tax residency rules: Determine where you are tax resident under applicable tax laws (not just where you hold citizenship)
Provide timely updates: Notify your financial institution within 30 days of any change in tax residency
Maintain supporting documentation: Keep records supporting your declared tax residency (tax returns, residency certificates, etc.)
Understand TIN requirements: Know your Tax Identification Number for each jurisdiction where you are tax resident
Respond to information requests: Cooperate with financial institution requests for additional documentation or clarification
Seek professional advice: Consult tax advisors if you have complex residency situations (multiple residences, frequent relocations, etc.)
Be aware of reporting consequences: Understand that your account information will be shared with tax authorities in your jurisdiction(s) of tax residence

Tax Identification Numbers (TINs) for Hong Kong:

Individuals: Hong Kong Identity Card Number
Companies: Business Registration Number issued by the Business Registration Office of the IRD

Resources and Guidance

Official IRD Resources

The Hong Kong Inland Revenue Department provides comprehensive guidance materials for financial institutions and taxpayers:

Resource	Description	URL
AEOI Main Page	Overview of Hong Kong’s AEOI framework	www.ird.gov.hk/eng/tax/dta_aeoi.htm
Reportable Jurisdictions	Official list of reportable jurisdictions	www.ird.gov.hk/eng/tax/aeoi/rpt_jur.htm
Guidance for FIs	Detailed guidance on due diligence and reporting	www.ird.gov.hk/eng/tax/aeoi/guidance.htm
Self-Certification	Information on self-certification requirements	www.ird.gov.hk/eng/tax/aeoi/self_cert.htm
Compliance	Enforcement approach and penalty information	www.ird.gov.hk/eng/tax/aeoi/dta_comp.htm
FAQs	Frequently asked questions on AEOI	www.ird.gov.hk/eng/faq/dta_aeoi.htm

OECD Resources

Financial institutions should also reference OECD materials to ensure consistency with international standards:

OECD CRS Portal: Comprehensive resources on the global CRS framework
CRS Commentaries: Detailed interpretive guidance on CRS provisions
CRS Implementation Handbook: Practical implementation guidance for financial institutions
CRS-related FAQs: Answers to common questions on complex scenarios

Legislation

The complete legal framework can be accessed through:

Inland Revenue Ordinance (Cap. 112): www.elegislation.gov.hk/hk/cap112
Part 8A: Automatic Exchange of Financial Account Information
Schedule 17D: Due diligence procedures
Schedule 17E: Reportable jurisdictions
Sections 80B-80F: Penalty provisions

Key Takeaways: CRS Compliance in Hong Kong

Annual deadline is May 31 for reporting the previous calendar year’s account information to the IRD
Over 80 jurisdictions have active CRS exchange relationships with Hong Kong as of 2025
All financial institutions (except exempted ones) must implement CRS due diligence and reporting procedures
Self-certifications are mandatory for all new accounts opened since January 1, 2017
Account holders must update their self-certifications within 30 days of any change in tax residency
Hong Kong-only residents are not reported – CRS only applies to accounts held by tax residents of reportable jurisdictions
Penalties are substantial: Range from HK$10,000 for administrative failures to HK$1,000,000+ plus imprisonment for fraud
Criminal liability applies for deliberate false reporting or intentional evasion of CRS obligations
IRD conducts regular reviews including desk-based, on-site, and thematic examinations to ensure compliance
Professional advice is recommended for complex classification issues and multi-jurisdiction tax residency situations
The reportable jurisdictions list is updated regularly – financial institutions should consult the official IRD website
Robust written policies and procedures are essential for demonstrating compliance with CRS requirements

Disclaimer: This article provides general information about CRS reporting requirements in Hong Kong based on legislation and official guidance as of 2025. It is not intended as legal or tax advice. Financial institutions and individuals should consult with qualified tax professionals and legal advisors for guidance specific to their circumstances. CRS requirements are subject to change through amendments to the Inland Revenue Ordinance and updates to IRD guidance. Always refer to the official IRD website and current legislation for the most up-to-date information.

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