The blacklisting saga did not start with Spain, but it did end with a timely correction related to it. Harbour Times explains how Hong Kong was taken off the Spanish tax haven list.
Friends of Harbour Times would be familiar with the remedy of Hong Kong being named a non-cooperative tax jurisdiction by the European Union earlier this year. Spain, which took Hong Kong off its national ‘blacklist’ in April 1, 2013, was one of the two saviours (the other one being Estonia).
Hong Kong was initially designated, by the Spanish government, as a “tax haven” among 47 other tax jurisdictions in 1991 under a Royal Decree (1080/91). The legislation was amended in 2003 as the Spanish parliament passed the Royal Decree 116/2003 which stated that a blacklisted country would be removed from the list provided that a Double Taxation Agreement (DTA), with an exchange of information clause or a Tax Information Exchange Agreement (TIEA), is signed between that country and Spain.
In 2011 Hong Kong concluded a comprehensive agreement for the avoidance of double taxation (CDTA) with Spain. The treaty came into force on April 13, 2012. It took another year for the Spanish government to offer Hong Kong its rightful status under the aforementioned Royal Decree, and another two years for the EU authorities to acknowledge the updates.
The CDTA signed with Spain is the 20th of its kind between Hong Kong and other countries. The latest, 33rd, CDTA was signed by Financial Secretary John Tsang and the Romanian counterpart, State Secretary for Public Finance Attila György.