Hong Kong and HSBC under scrutiny as US cracks down on American tax cheats
US authorities are stepping up their investigation of tax evasion across Asia, with one recent case involving HSBC Holdings and Hong Kong providing an example of how wide the net is being cast to catch American tax cheats.
US authorities are stepping up their investigation of tax evasion across Asia, with one recent case involving HSBC Holdings and Hong Kong providing an example of how wide the net is being cast to catch American tax cheats, lawyers say.
Officials with the US Internal Revenue Service were now stationed in overseas jurisdictions, including the American consulate in Hong Kong, gathering information, said Travis Benjamin, the head of tax practice at law firm Deacons.
"We're seeing greater activity of foreign tax authorities, not only those of the US, in investigations and information gathering in jurisdictions across Asia, including Hong Kong and Singapore," Benjamin said.
With the Foreign Account Tax Compliance Act (Fatca) taking effect since July last year, US authorities would increase their investigations of international tax evasion by US taxpayers in Hong Kong, said Peter Chen, a partner at Zhong Lun, a Chinese law firm.
Under Fatca, financial firms around the world are required to report to the IRS information on clients who are US taxpayers.
HSBC and Hong Kong were part of an international web of suspected tax evasion announced on the website of the US Department of Justice last month.