Financial Services Bureau - Tax newsletter

Macau SAR Support Implementation of New Standard for Automatic Exchange of Tax Information

To enhance tax transparency and combat cross-border tax evasion, the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes has been advocating the implementation of a newly announced standard known as the Common Reporting Standard (CRS), through which jurisdictions can automatically exchange financial account information they obtained from local financial institutions. At present, over 60 jurisdictions around the word have already committed to implement this new single global standard by 2017 or at the latest by the end of 2018. As a member of the Global Forum, Macau SAR expresses its support to the new standard. In order to fulfill its international obligations, Macau SAR will soon initiate the legislative procedures necessary for the amendment of relevant domestic laws to ensure timely compliance with the new standard.

Unlike the existing practice where exchange of information is only carried out on request by other jurisdictions, with main references to the United States Foreign Account Tax Compliance Act (FATCA), the new standard will allow automatic exchange of financial account information for tax purposes among participating jurisdictions on an annual basis, and financial institutions are also required to follow the due diligence procedures consistent with the new standard.

Macau SAR has successfully passed the Phase I and Phase II Peer Reviews conducted by the Global Forum in 2011 and 2013 respectively, confirming that both its legal framework and actual operations with regards to exchange of tax information meet internationally agreed standards. Until now, Macau SAR has concluded tax treaty with 20 jurisdictions, of which 5 are Double Taxation Conventions and 15 are Tax Information Exchange Agreements.




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Press Release

OECD Global Forum’s Fourth Meeting
Officially Adopted Macao SAR’s Phase I Review Report

  Over 250 delegates from 93 countries, regions and international organizations took part in the fourth general meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes held in Paris, France on 25-26 October 2011. A total of 17 review reports of different countries and regions, including the Phase I review report of Macao SAR, were adopted in the meeting. The report of Macao SAR was already published and posted on the OECD’s official website, signifying that Macao SAR met internationally agreed standards on transparency and exchange of information on tax matters.

  The Phase I Review mainly focused on whether the region’s current legal and regulatory framework was sufficient and could effectively guarantee the implementation of tax information exchange. It covered a number of legislation including Commercial Code, Commercial Registry Code, Civil Code, Offshore Business Act, anti-money laundering regulations and guidelines, tax laws, Financial System Act, as well as Information Exchange Act.

  Macao SAR would have to continually fulfill relevant international requirements to ensure that measures on enhancing tax transparency and exchange of information are being effectively carried out. Meanwhile, in an effort to facilitate the Global Forum’s Phase II review of Macao SAR scheduled on the first half of year 2013 on the implementation of information exchange standards in practice, Macao SAR would study and follow up the suggestions for improvement made in the Phase I report shortly afterwards.

 




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Press Release

OECD Global Forum Review Panel Agrees Macao SAR Meets International Standards on Tax Information Exchange

  The delegation of Macao SAR attended the peer review meeting held from 19 to 23 September in Paris, France, as invited by the OECD Global Forum on Transparency and Exchange of Information for Tax Purpose. The delegation introduced in the meeting the work that Macao SAR had done in recent years regarding the promotion of transparency and exchange of information for tax purposes, and provided detailed answers to inquiries raised by the peer review panel.

  At the end, the review panel members unanimously agreed that Macao SAR had the relevant legal and regulatory framework in place that could ensure the effective implementation of tax information exchange, and that Macao SAR complied with the internationally agreed standards. The panel would therefore propose the Global Forum to officially adopt the Phase I Peer Review Report for Macao SAR in the general meeting of the Global Forum to be held from 25 to 26 October in Paris, France.

  The Phase I Review was mainly about the legal and regulatory framework regarding information exchange, and it covered areas in Commercial Code, Commercial Registry Code, Civil Code, Offshore Business Act, anti-money laundering regulations and guidelines, tax laws, Financial System Act, as well as Information Exchange Act. It also covered the various tax agreements that Macao SAR had concluded with other jurisdictions. The passage of the review report would mark a cornerstone in Macao SAR's work of promoting transparency in tax matters. Macao SAR would study and follow up the suggestions for improvement made in the report, and would continue its efforts to conclude more tax agreements with different countries and regions in order to fulfill its international obligation as the Forum's member.

  Macao SAR has, so far, concluded Tax Information Exchange Agreements (TIEAs) or Double Taxation Conventions (DTCs) that comply with the latest internationally agreed standards with 12 different countries or regions. The SAR has also initially signed TIEAs with India, Malta, and Jamaica respectively. In addition, it is now actively negotiating TIEAs with Ireland, New Zealand, Germany and Argentina. Besides, a new round of working level meeting with Vietnam and Hong Kong SAR on DTC negotiation is expected to be held later this year.

 




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CIRCULAR NOTE No. 02/DIR/2011
 
 
1.      This circular note aims at clarifying the stated in Article 6 (1) of Law 20/2009 of 24 August regarding the exchange of information on tax matters.
 
2.      In particular, it is intended to clarify the requirement according to which, the request of information to be prepared by the competent authority of the other jurisdiction should include all information that can appropriately recognize the identity of the respective individuals or collective persons.
 
3.      According to Article 1 (1) of Law 20/2009, it is provided that this law sets the applicable rules on the exchange of information within the conventions or agreements on tax matters signed between Macao Special Administrative Region (hereinafter referred to as MSAR) and other tax jurisdictions.
 
4.      The referred law sets for the regulatory framework which allows to carry out the exchange of information on tax matters in accordance with the international agreements entered into by MSAR which are based on the Model Agreement prepared by the OECD.
 
5.      In what refers to the identification elements of the persons which should be included in the requests for exchange of information, the OECD proposes the adoption of a flexible interpretation: the name and address of the person possessing the information should be included in the request only to the extent known. Otherwise, the request of information may be filed based on other identification elements (such as a bank account number or similar identifying information).
 
6.      By this circular note it is confirmed that an identical interpretation is given to Article 6 (1) of Law 20/2009 in what refers to the elements required for the identification of the persons subject of the request.
 
7.      Thus, it is considered that a request of information on tax matters contains all information that can appropriately recognize the identity of the persons, when it contains sufficient elements which allow to identify the person subject of the request, not being necessary the inclusion of its name and/or address.
 
8.      Therefore, for instance, to the extent that the name and/or address of the bank account holder is unknown, it will be considered as an appropriate identification element for the purposes of exchange of information, the inclusion of the number of the bank account or other similar identifying information.
 
      Macau, 15 July 2011.

 

Director of Financial Services Bureau,
Vitória da Conceição




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