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Money transfers out of the US are often automatically reported to the IRS, but additional rules exist when sending money to Hong Kong. Avoid penalties by following the regulations of both the country you’re sending from and to.
On recommendations from the Hong Kong International Financial Action Task Force on Money Laundering, Hong Kong requires additional ID verification for all transfers and exchanges over HKD$8,000 (about USD$1,000). Sending or receiving more than HK$8,000 in Hong Kong will prompt the bank, remittance agent or money changer to ask you for proof of identification, including:
Remittances over HK$8,000 cannot be sent or received without this information.
See how lower fees, higher transfer limits and stronger exchange rates can help you get more money to family or friends in Hong Kong.
Failing to provide the appropriate information may prevent your recipient from accepting your money transfer to Hong Kong. Hong Kong also has steep penalties for money laundering, which could be levied against you if you try to avoid regulations on identification. Money laundering has a maximum penalty of HK$5,000,000 and 14-year imprisonment.
For business transfers, yes. Gift taxes in Hong Kong are levied at a scaling rate:
Individuals receiving money transfers in Hong Kong will not be subject to a gift tax, as Hong Kong has no gift tax or estate tax for citizens, only businesses.
You should, to be safe. If you’re sending more than $15,000 as a gift, sending to a foreign account in your name that holds over $10,000 or sending over $10,000 as a business, it is best to let the IRS know. By law, banks already report cash transactions in and out of the US. Money transfer companies are sometimes held to reporting thresholds as low as $1,000. Because of these systems, the government will likely discover if you fail to report large sums out of the US — avoid large fines and possible jail time by reporting transactions.
Sending a lot of money out of the country? Know what the IRS expects of you.
Cash pickup and bank account delivery are the most common ways to send money to Hong Kong. No matter how you send, keep in mind that sending over HK$8,000 will require your recipient to provide additional proof of identification, even if you’re sending to a bank account.
As with all international money transfers, be wary of potential fraud and only send money to people you know. Using a reputable provider can safeguard you from potential scams.
How to send money to Hong Kong
When it comes to tax regulations, Hong Kong is an easy country to send money to. Your recipient most likely won’t have to fill out any extra forms aside from providing additional ID. It is best to err on the side of caution when it comes to dealing with the IRS, so consult a tax specialist if you are unsure whether or not you should report your transfer to the IRS.
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