Common Reporting Standard (“CRS”) for employee

MPF schemes and ORSO registered schemes will be Reporting FIs effective from 1 January 2020. Under the AEOI legislation, these Reporting FIs (i.e. MPF schemes and ORSO registered schemes) will be liable for reporting on the financial accounts of members and employers who are tax residents of any reportable jurisdiction. For identification of the tax residency status of each new account holder, Manulife is required to collect a self-certification of the account holder for determining of his/her tax residency status and to keep it for a period of six years (beginning on the date on which the due diligence procedures are completed) in accordance with the requirement of the IRO.

Customers will be asked to provide the following information:

• Name
• HKID/ Passport number
• Current residential address
• Jurisdiction(s) of tax residence
• Taxpayer identification number(s) (“TIN”) or its equivalents
• Date of birth

Customers are required to complete a self-certification. Self-certifications may be part of the account opening documents or a separate form. The self-certification will cover details such as jurisdiction of tax residence and TIN.

This is a formal declaration that the account holder provides in connection with his/her tax residence under the AEOI regime.

According to the due diligence procedures set out in the AEOI legislation (which are based on the international standard required), self-certification would be required from account holders (members and/or employers) for all new MPF/ORSO registered scheme accounts (i.e. accounts opened on or after 1 January 2020). As for pre-existing MPF/ORSO registered scheme accounts (i.e. accounts maintained as at 31 December 2019), if Manulife has doubt about the tax residence of an account holder, we may also obtain a self-certification from such account holder to establish his/her tax residence.

Information that MPF/ORSO account holders required to provide includes basic identification information (e.g. name, HKID or passport number, current residential address, date of birth), jurisdiction of residence and taxpayer identification number (“TIN”) with respect to each jurisdiction. If an MPF/ORSO account is held by an individual as a partner in a partnership, the account is to be treated as an entity account of such partnership, NOT as an individual account. On the other hand, if an MPF/ORSO account is held by an individual as a sole-proprietor of a business, the account is to be treated as an individual account.

If the account holder has doubt about his/her tax residence, he/she may consider seeking professional advice as Manulife does not give tax or legal advice.

In OECD’s AEOI portal, you can find more information regarding the tax laws of different jurisdictions for defining tax residence. The website address is:
https://www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/tax-residency/

An account holder who knowingly or recklessly provides a statement that is misleading, false or incorrect in a material particular in making a self-certification to Manulife is an offence under the IRO and is liable on conviction to a fine at level 3 ($10,000).

Under the AEOI legislation, Manulife is required to apply due diligence procedures to identify the tax residency(ies) of MPF/ORSO registered scheme account holders (members and/or employers) and controlling persons for the purpose of AEOI. Therefore an MPF/ORSO registered scheme account holder is required to declare his/her tax residency(ies) to Manulife by way of self-certification. Otherwise, the account opening process will be adversely affected and could not be completed.

A person’s tax residence is defined by having regard to jurisdiction-specific laws and individual circumstances. If in doubt, customers are advised to consult their tax advisor or visit the OECD website for more information on the tax resident rules of the respective jurisdictions as Manulife does not give tax or legal advice.

A taxpayer identification number (“TIN”) or its equivalent is a unique number typically issued to a taxpayer by the competent authority of the jurisdiction. Some jurisdictions do not issue TINs, and other jurisdictions accept national identification numbers or similar unique identifiers as valid entries on the self-certification.

Information regarding the TIN of the respective jurisdictions can be found from the following OECD website (http://www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/tax-identification-numbers).

New customers (i.e. accounts set up on or after January 1, 2020) have to complete a self-certification which is embedded in the Employer Application Form or Employee Enrolment Form when enrolling into an MPF / ORSO registered scheme. Existing customers will be required to complete a similar self-certification in certain circumstances (e.g. ownership change, tax residency change, or change in personal particulars) at a later stage where we have insufficient information to establish the account holder’s tax residency.

In general, whether or not an individual is a tax resident of a jurisdiction is determined by having regard to the person’s physical presence or stay in a place (say, whether over 183 days within a tax year. That a person has paid taxes charged by a jurisdiction (say, value-added tax, withholding tax or capital gains tax) does not automatically render that person a tax residence of that jurisdiction.

In OECD’s AEOI portal, you can find more information regarding the tax laws of different jurisdictions for defining tax residence. The website is:
https://www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/tax-residency/

If the MPF/ORSO registered scheme account holder has doubts about his/her tax residence, he/she may consider seeking professional advice.

Each jurisdiction has its specific definition of tax residence. Tax laws may differ amongst jurisdictions and the tax residence of an individual MPF/ORSO registered scheme account holder (member and/or employer) may change from one year to another. Account holders ought to verify and update their tax residence and seek legal advice if necessary.

For new MPF/ORSO registered scheme accounts, Manulife will seek self-certification from account holders (members and/or employers) in respect of their personal information, including tax residence. For pre-existing MPF/ORSO registered scheme accounts, Manulife will be required to conduct due diligence procedures to determine if a MPF/ORSO an account holder is a reportable person. In case of doubt, self-certification from the account holders may be obtained to establish their tax residency(ies).

MPF/ORSO registered scheme account holders should inform Manulife of any change in circumstances which affects their tax residency status or causes the information contained in a previously submitted self-certification to become incorrect or unreliable. Such notification should be given by means of a suitably updated self-certification form within 30 days of the change in circumstances.

The CRS due diligence procedures are mandatory and subject to local regulations. Manulife could be sanctioned if it fails to identify, collect and report information of reportable accounts to the IRD. Therefore Manulife needs to verify the details provided by customers as part of the self-certification. This verification process could include requiring address proof, copies of passports, past tax returns or other forms of evidence.

The AEOI legislation imposes a legal obligation on Manulife to obtain a self-certification in respect of new accounts. If a customer does not provide the self-certification as required, the MPF/ORSO registered scheme account opening process will be adversely affected and could not be completed.

For a pre-existing MPF/ORSO registered scheme account holder that does not provide self-certification and/or other supporting documents when being requested, as prescribed by the AEOI legislation, Manulife will need to determine the member’s tax residency(ies) based on the information currently on record, and if this is in a reportable jurisdiction, Manulife will report the relevant MPF/ORSO account information to the IRD. The IRD will in due course, perform information exchange with such reportable jurisdiction that has activated AEOI exchange relationship with Hong Kong.

According to the due diligence procedures set out in the AEOI legislation, which are based on the international standard, with effect from 1 January 2020, all new MPF/ORSO registered scheme account holders have to provide self-certifications to Manulife in respect of their personal information, including tax residence. For pre-existing MPF/ORSO registered scheme accounts, Manulife will be required to conduct due diligence procedures to determine if an account holder is a reportable person. In case of doubt, self-certification from the account holders may be obtained to establish their tax residency(ies).

Furthermore, Manulife can opt to apply due diligence procedures of new MPF/ORSO registered scheme accounts to pre-existing MPF/ORSO registered scheme accounts. In other words, an account holder may have to provide a self-certification to Manulife regarding a pre-existing MPF/ORSO registered scheme account.

Manulife must establish, maintain and apply CRS due diligence procedures to identify account holders who are tax residents in reportable jurisdictions. The self-certification is required to perform these due diligence procedures to identify the tax residency of the account holder.

In accordance with the Personal Data (Privacy) Ordinance (“PDPO”), MPF/ORSO registered scheme account holders have the right to request access to their personal data.

The account holders can make use of customers servicing channels of Manulife to check and/or update their tax residency status as needed.

Manulife is required to identify the financial accounts held by individuals or entities liable to tax by reason of residence in the AEOI partner jurisdictions (“reportable jurisdictions”). Manulife will collect and furnish to the IRD information of the identified account holders, and where relevant, controlling persons and the financial account information on an annual basis. IRD will then transmit the information to the competent authority of the relevant jurisdiction of which the account holder or controlling person is tax resident.

Updated list of reportable jurisdictions could be found in the website of IRD:
https://www.ird.gov.hk/eng/tax/aeoi/rpt_jur.htm

If you are not a tax resident in any jurisdiction outside Hong Kong, Manulife is not required to report your MPF/ORSO registered scheme account information to IRD for transmission to any tax administration outside Hong Kong.

As far as personal data is concerned, the information to be exchanged includes name, residential address, jurisdiction of residence, TIN, and date of birth. As for MPF/ORSO registered scheme account data, it includes the account number (or a unique identifying number), account balance or value (year-end) for the year concerned, and the total gross amount paid or credited to the account holder in respect of the account during the relevant period, including the aggregate amount of any redemption payments made to the account holder during that period.

For accounts that are held by customers who are reportable individuals/entities, Manulife has to provide certain specific account information to the IRD. For instance, a customer who is a tax resident of Germany would be reported by Manulife to the IRD, which in turn would exchange such customer’s data with the German tax authority.

The information to be exchanged includes name, residential address, jurisdiction of residence, TIN, date of birth and account balance, as well as certain account information in respect of the reportable MPF/ORSO account.

In respect of MPF schemes, an employer is able to make voluntary contributions for an employee member in addition to mandatory contributions. Upon a member ceasing employment prior to his/her normal retirement date other than due to specified conditions under the MPF legislation, only the appropriate vested proportion of the employer’s voluntary balance shall be paid to the member.

For ORSO registered schemes, the member’s benefits may be subject to a vesting scale. The vesting scale may specify the percentage of the vested benefits derived from employer’s contributions that the member is entitled to based on the number of years of service/participation.

In respect of the portion of benefit not yet vested to a member, if, for regulatory and customer reporting purposes, the account balance would be reported as zero in respect of the non-vested portion (as there is no vested benefit accrued to the member), the value in respect of this portion should be also reported as zero for AEOI purposes.

It should be emphasized that the account information of the scheme member should still be reported in this case, but only that the account value in respect of the non-vested portion would be zero. In subsequent years, should the benefits become vested in the member, the account balance for the member account concerned in the reporting should reflect such increase accordingly.

Manulife takes information security very seriously and has established policies and procedures to ensure that customer information is properly protected. We also have measures to protect personal information in accordance with existing laws and regulations, including but not limited to controls regarding accessing, storing, processing, transmitting and handling of personal information.

To know more about Manulife’s data privacy policy, simply click here.