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Tax
campaigners, however, were quick to raise
concerns that the compromised proposals
risked opening up a major new front for
tax planners to exploit.
In
particular, they noted that, in its watered
down form, the CCCTB proposal permitted
multinationals to offset losses in one EU
jurisdiction against profits in another
- a tax break that is currently unavailable.
John
Christensen, director of the Tax Justice
Network, said: "The European Commission
is offering multinational corporations the
best of both worlds, and the public will
be the losers: the commission proposes to
allow cross-border offset of losses without
preventing intra-group profit shifting.
This widens the possibilities for tax avoidance."
While
not part of these schemes "Hong Kong
accords priority to expanding its network
of Comprehensive Avoidance of Double Taxation
Agreements (CDTAs), which provide relief
for double taxation, and enters into standalone
Tax Information Exchange Agreements (TIEAs)
with jurisdictions if necessary," said
an HK Government spokesman.
"All
CDTAs and TIEAs signed by Hong Kong have
embedded an article on Exchange of Information
(EoI) which meets international standard,"
he said.
Up
to now, Hong Kong has signed 32 CDTAs and
seven TIEAs. Among the 28 European Union
Member States, Hong Kong has already signed
13 CDTAs and two TIEAs. Negotiations on
CDTA and TIEA are also under way with five
other member states of the European Union.
"We
are puzzled and very disappointed to note
that the European Commission has regarded
Hong Kong as non-tax cooperative. A couple
of the members states which have featured
Hong Kong on their 'blacklists' had actually
signed or are negotiating CDTAs/TIEAs with
us. Hong Kong has been denied any opportunity
to comment on or clarify our position before
European Commission's proposed blacklisting.
The listing was unilateral and procedurally
unfair. We strongly urge the European Commission
to review with member states their lists
of non-cooperative tax jurisdictions in
order to reflect the latest development
of Hong Kong's tax co-operation with those
jurisdictions," the spokesman said.
In
the light of the rapidly evolving international
landscape on tax co-operation, Hong Kong
indicated to the Organisation for Economic
Co-operation and Development (OECD) in September
2014 its support for implementing the new
standard on Automatic Exchange of Financial
Account Information in Tax Matters (AEOI).
"Our
commitment to implement AEOI was covered
in the European Commission's annual report
on Hong Kong released in April 2015. It
was also among the topics discussed at the
annual European Union-Hong Kong structured
dialogue meeting held in Brussels in November
2014," said the spokesman.
The
government is currently conducting a consultation
exercise to gauge views on proposals to
apply with adaptation for Hong Kong the
OECD standard on AEOI and plan to introduce
an amendment bill into the Legislative Council
in 2016, before commencing the first exchange
by the end of 2018.
"As
an international financial centre and responsible
member of the international community, Hong
Kong is strongly committed to enhancing
tax transparency and combating cross-border
tax evasion. We seriously refute any allegation
of Hong Kong as a tax haven. We would continue
dialogue with the European Union and its
member states so that they are kept abreast
of our commitments and efforts on tax co-operation,"
the spokesman said.
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