For Manulife Global Select (MPF) Scheme

Important to note:

You should consider your own risk tolerance level and financial circumstances before making any investment choices. When, in your selection of constituent funds or the Default Investment Strategy (“DIS”), you are in doubt as to whether a certain constituent funds or the DIS is suitable for you (including whether it is consistent with your investment objectives), you should seek independent financial and/or professional advice and make investment choices most suitable for you taking into account your circumstances.
The asset allocation of the Manulife MPF Core Accumulation Fund and the Manulife MPF Age 65 Plus Fund (“DIS CFs”) in the DIS and some of the constituent funds which are referred to as Retirement Funds will change over time and hence the risk profile and return will also change over time. The DIS CFs or the Retirement Funds may not be suitable for all members. You should understand the relevant risks involved before investment and consider factors other than age and review your own investment objectives.
The Manulife MPF Interest Fund and the Manulife MPF Stable Fund (collectively the “Guaranteed Funds”) under the scheme each invests solely in approved pooled investment funds in the form of insurance policy provided by Manulife (International) Limited. The guarantee is also given by Manulife (International) Limited. Your investments in the Guaranteed Funds, if any, are therefore subject to the credit risks of Manulife (International) Limited. Please refer to sections 3.4.2 (Manulife MPF Stable Fund (the “Stable Fund”)) and 7.2.4(b) (Manulife MPF Stable Fund) and sections 3.4.1 (Manulife MPF Interest Fund (the “Interest Fund”)) and 7.2.4(c) (Manulife MPF Interest Fund) of the MPF Scheme Brochure for details of the credit risks, guarantee features and qualifying conditions.
The Manulife MPF Retirement Income Fund (the “Retirement Income Fund”) does not guarantee distribution of dividend, the frequency of distribution, and the dividend amount/yield. Dividends may be paid out of the realized capital gains, capital and/or gross income while charging/paying all or part of the fees, charges and expenses to/out of the capital, resulting in an increase in distributable income available for dividend distribution. Payment of dividends out of capital and/or effectively out of capital represent a withdrawal of part of the original investment or from any capital gains attributable to that original investment. Distribution of dividends will result in an immediate decrease or adjustment in the net asset value per unit of the Retirement Income Fund on the ex-dividend date.
Members who are below age 65 should note that the regular and frequent distribution of dividends and reinvestment of such dividends into the Retirement Income Fund will inevitably involve an investment time-lag during which dividends are not reinvested and it is subject to out-of-market risk on a recurring basis (currently, on a monthly basis). With the feature of dividend distribution, the return of the Retirement Income Fund for these Members may be impacted negatively or positively as its net asset value per unit may have gone up or down at the time when dividends are reinvested. Therefore the return of the Retirement Income Fund for these Members may deviate from that of a constituent fund with similar investment portfolio without such arrangement and may not always be advantageous to these Members.
Investment involves risks and not each of the constituent funds would be suitable for everyone. You should consider the risks associated with each of the constituent funds and the DIS and your investments/accrued benefits may suffer loss.
Before making your investment choices, you should read the MPF Scheme Brochure and Key Scheme Information Document (KSID) for details including risk factors, fees and charges of the scheme. You should not make your investment decision based on this material alone.

Common Reporting Standard (“CRS”) for employee

Retirement. The time to live your dreams.

With the enactment of the legislative amendments to the Inland Revenue Ordinance, MPF and ORSO registered schemes will be required to comply with CRS for Automatic Exchange of Financial Account Information (“AEOI”) with effect from January 1, 2020.

For full details about AEOI/CRS, please visit the Organization for Economic Cooperation and Development (“OECD”) and Inland Revenue Department’s AEOI website.

FAQs

What is Automatic Exchange of Financial Account Information in Tax Matters (“AEOI”)?

AEOI involves the transmission of financial account information from Hong Kong to an overseas tax jurisdiction with which Hong Kong has an AEOI arrangement (or known as an “AEOI partner”). The information relates only to the tax residents of the jurisdiction of the AEOI partner (“reportable jurisdiction”).

What is Common Reporting Standard (“CRS”)?

CRS is the standard endorsed for OECD members to implement under AEOI, it requires financial institutions in participating jurisdictions to obtain and report relevant financial account information of their customers to help fight against tax evasion and protect the integrity of tax systems.

Why does Hong Kong have to implement AEOI?

Exchanging financial account information on an automatic basis is a new international standard, designed to enhance tax transparency and combat cross-border tax evasion. Members of the international community have been advocating AEOI as a more efficient mode of international tax cooperation and have made it a new global standard. The OECD released in July 2014 the Standard for Automatic Exchange of Financial Account Information in Tax Matters, calling on governments of all jurisdictions to obtain relevant financial account information from their financial institutions and exchange that information automatically with jurisdictions of residence of account holders, and where relevant, controlling persons on an annual basis. For the meaning of “controlling persons”, please refer to the definition of “controlling person” under Section 50A(1) of the Inland Revenue Ordinance (Cap. 112)(“IRO”).

As a responsible international citizen and a leading financial center, Hong Kong indicated in September 2014 our commitment to implement AEOI and commence the first information exchanges by the end of 2018. To deliver the commitment, Hong Kong commenced the first exchanges in September 2018.

The Inland Revenue (Amendment) (No. 3) Ordinance 2016, which commenced operation on 30 June 2016, has put in place a legislative framework for Hong Kong to implement AEOI. Subsequently, further amendments were made to the AEOI legal framework under the Inland Revenue (Amendment) (No. 2) Ordinance 2017, the Inland Revenue (Amendment) Ordinance 2018 and the Inland Revenue (Amendment) (No. 2) Ordinance 2019. The above Amendment Ordinances are collectively referred to as “the AEOI legislation”.

In particular, the Inland Revenue (Amendment) (No. 2) Ordinance 2019 removed Mandatory Provident Fund Schemes registered under the Mandatory Provident Fund Schemes Ordinance (Cap. 485) (“MPF schemes”) and Occupational Retirement Schemes registered under the Occupational Retirement Schemes Ordinance (Cap.426) (“ORSO registered schemes”) from the list of non-reporting financial institutions (thereby rendering such schemes reporting financial institutions with regard to AEOI); and increased the number of reportable jurisdictions from the current 75 to 126 with effect from 1 January 2020.

When will CRS be applied to MPF schemes and ORSO registered schemes (collectively “Retirement Schemes”)?

According to the Inland Revenue (Amendment) (No. 2) Ordinance 2019, MPF schemes and ORSO registered schemes will become reporting financial institutions (“Reporting FIs”) with effect from 1 January 2020. Starting from that date, Retirement Schemes are required to comply with the due diligence and reporting obligations relating to AEOI. If members and/or employers of the Retirement Schemes concerned are tax residents of the reportable jurisdictions, such Retirement Schemes will need to report in 2021 for the first time to the IRD the financial account information of the relevant persons, covering the year 2020, for transmission to the competent authorities of the AEOI partner jurisdiction.

How will MPF/ORSO registered scheme account holders be affected by AEOI?

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.

What information are customers required to provide?

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

How is the information required for CRS captured?

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.

What is a self-certification?

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).

Why am I asked to provide my tax residency in the self-certification?

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.

How is tax residence defined?

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.

What is a Taxpayer identification number (“TIN”) and how can I find mine?

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).

When does a self-certification have to be completed?

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.

How will a customer knows whether or not he/she is a tax resident of an overseas jurisdiction?

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.

Will the IRO specify who are tax residents of an overseas jurisdiction? How can Manulife know and identify tax residence of their MPF/ORSO account holders?

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).

What if there are changes in circumstances that affect a customer’s tax residency?

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.

Why does Manulife ask for supporting documents in addition to the self-certification?

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.

What happens if a customer refuses to provide a self-certification?

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.

I am a Hong Kong permanent resident and do not hold any foreign passports and only have tax liability in Hong Kong. Do I need to provide a self-certification when opening a new MPF/ORSO account? Do I need to provide a self-certification for my pre-existing MPF/ORSO accounts?

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.

Why does Manulife ask for a self-certification even if a customer lives in the same jurisdiction they are paying taxes in?

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.

Can I check my tax residency status held with Manulife, and how?

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.

Who will be the reportable persons for AEOI?

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

I am a Hong Kong permanent resident and do not hold any foreign passports and only have tax liability in Hong Kong. Will my information be reported to other jurisdictions under the AEOI regime?

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.

If a customer is a tax resident of an AEOI partner jurisdiction and hold an MPF/ORSO account with Manulife, what information will be exchanged?

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.

How is a customer’s data shared with third parties?

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.

As for the non-vested benefits in a customer’s MPF/ORSO account, how does Manulife calculate for the purpose of AEOI/CRS reporting?

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.

The information that customers are providing is confidential and sensitive. How will Manulife protect this information?

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.