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Do HSBC HK or Expat Actually Bother with Foreign Taxes?

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  1. #1

    Do HSBC HK or Expat Actually Bother with Foreign Taxes?

    This question is definitely not about HSBC reporting your income to the US/IRS. I have no doubts they do - nobody wants to mess with FATCA. But... as much as everyone is scared of the US, it doesn't mean they have any incentives of reporting elsewhere. Technically may be they should, but do they actually bother?

    Does anyone have a personal experience with HSBC HK or Expat reporting your offshore income to the country of your residence?


  2. #2

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    HSBC Expat is operated out of Jersey as far as i know so will need to report Common Reporting Standard (CRS) which is the OECD's equivalent of FATCA.

    HSBS in Hong Kong wont need to report on HK tax residents they will only need to report on the balances for their overseas customers, also under CRS and FATCA rules.

    Now here's the thing. Jersey and HK are operating under two different CRS models. I believe HSBC Expat will report direct to the tax authorities in the customers country of residence while HSBC HK will report to the HK IRD who in turn will exchange information with the tax authorities in the customers country of residence. I am not sure if this is automatic or upon request.

    But to answer your question, unless you live in a country which hasnt signed up to CRS, yes they will report offshore income or at least the balance on acocunt.

    You can check the list of countries here https://www.oecd.org/tax/automatic-e...-jurisdiction/


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    The OECD notes say its automatic .....

    No clue how much of this is implemented or even reviewed (automatically or manually / filters etc)

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  4. #4

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    Quote Originally Posted by shri:
    The OECD notes say its automatic .....

    No clue how much of this is implemented or even reviewed (automatically or manually / filters etc)
    Im not sure if Automatic is just terminoligy, i wouldnt be convinced that they have the infratructure/IT to actually make it automatic having experienced the reporting side here in HK. They have a portal where you just upload the data, download into an encrypted xml file and then upload it again. Would be interested to know what happens after that.

    The only compulsory information at the moment is the persons name, city and country of residence. You dont even need to include the TIN numbers.
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  5. #5
    Quote Originally Posted by Trebor:
    HSBC Expat is operated out of Jersey as far as i know so will need to report Common Reporting Standard (CRS) which is the OECD's equivalent of FATCA.

    HSBS in Hong Kong wont need to report on HK tax residents they will only need to report on the balances for their overseas customers, also under CRS and FATCA rules.

    Now here's the thing. Jersey and HK are operating under two different CRS models. I believe HSBC Expat will report direct to the tax authorities in the customers country of residence while HSBC HK will report to the HK IRD who in turn will exchange information with the tax authorities in the customers country of residence. I am not sure if this is automatic or upon request.

    But to answer your question, unless you live in a country which hasnt signed up to CRS, yes they will report offshore income or at least the balance on acocunt.

    You can check the list of countries here https://www.oecd.org/tax/automatic-e...-jurisdiction/

    Yes, that's how it is supposed to be... in theory. I doubt though HSBC Expat reports directly to foreign entities, possibly to the UK tax authorities at best. Do you think it would be even legitimate for a bank, which is not a government institution, to share ANY information with foreign governments directly? I can imagine something like that within EU, but not the rest of the world. The information on their site is pretty vague:

    "Tax reporting


    Interest is paid gross without the deduction of tax. It is your responsibility to report earnings to the appropriate tax authorities. However, all the interest you earn from your accounts may be subject to reporting to relevant tax authorities."

    They obviously have to report on the UK tax residents, otherwise they would be in legal trouble - anything else is unnecessary burden. And they likely avoid opening accounts for US residents exactly to avoid the burden of reporting, because they can't disregard it in case of the US.


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    Quote Originally Posted by PremierCat:
    Yes, that's how it is supposed to be... in theory. I doubt though HSBC Expat reports directly to foreign entities, possibly to the UK tax authorities at best. Do you think it would be even legitimate for a bank, which is not a government institution, to share ANY information with foreign governments directly? I can imagine something like that within EU, but not the rest of the world. The information on their site is pretty vague:

    "Tax reporting


    Interest is paid gross without the deduction of tax. It is your responsibility to report earnings to the appropriate tax authorities. However, all the interest you earn from your accounts may be subject to reporting to relevant tax authorities."

    They obviously have to report on the UK tax residents, otherwise they would be in legal trouble - anything else is unnecessary burden. And they likely avoid opening accounts for US residents exactly to avoid the burden of reporting, because they can't disregard it in case of the US.

    It's a regulatory requirement for them to report.

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    They are criminally liable and face heavy penalties if they don’t report.

    https://www.justice.gov/opa/pr/ubs-e...e%20James%20I.

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  9. #9

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    Quote Originally Posted by PremierCat:
    This question is definitely not about HSBC reporting your income to the US/IRS. I have no doubts they do - nobody wants to mess with FATCA. But... as much as everyone is scared of the US, it doesn't mean they have any incentives of reporting elsewhere. Technically may be they should, but do they actually bother?

    Does anyone have a personal experience with HSBC HK or Expat reporting your offshore income to the country of your residence?
    I don't actually know the answer to your question but let me put it to you this way. If you are a Hong Kong PR, all you need to open your bank account in Hong Kong is just the Hong Kong PR Card and on your CRS form, they will put your HKID. Nothing else.

    Now if you move to another country and you still have money in that account, you never told the bank your nationality, passport number and overseas tax ID. They literally only have your HKID number. So you tell me how on earth this account is going to get reported to your home country?

  10. #10

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    Quote Originally Posted by shri:
    The OECD notes say its automatic .....

    No clue how much of this is implemented or even reviewed (automatically or manually / filters etc)

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    How many fines have been levied on banks for failure to comply with CRS? That's the bigger question.

    Whereas FATCA is a totally different system and not the question at hand.

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