Talking about what’s hottest news related to our business in 2017, besides from updated Service System for Foreigners Working in China and its renewed policies, “CRS (Common Reporting Standard)” also stays in the spotlight.
Chinese government signed protocol on CRS during December in 2015, and noticed that since Jan. 1st in 2017, the government began to collect people’s Tax-related information, then exchange the collected financial information among participating countries.
#Here, HACOS helps you figure out how CRS works and its influences from 3 aspects:
❶ Whose information will be collected?
❷ How to collect?
❸ How can we deal with it?
We take China as an example:
1
Whose Information Will Be Collected?
a. Non-resident Taxpayer:
expats have stayed in China for less than 365 days per year.
Some may say:
I am an expat but have been living in China for a long period (with single departure within 30 days or multiple departures less than 90 days), so CRS is not my concern.
However, it seems that CRS has nothing to do with you, but according to Chinese Tax Law, you need to pay tax based on your taxable income because you are a tax resident of China.
The government’s inspection of individual income (including residents and expats) is not so strict so far, but policy are always changing, who knows?
b. Taxpayer of Non-resident Enterprise:
Foreign Representative Offices, or enterprises without setting up affiliated agencies in Chinese mainland but acquire revenues within China.
c. Overseas before-tax assets of Chinese residents.
2
How To Collect?
Recently, you may notice that there is a CRS Entity Self-Certification Form of Chinese version when you open an account in bank. ↓↓↓
Since Jul. 1st this year, you will know whether your or your company financial account information need to be collected and exchanged or not by filling out the Form when open a new account in the bank.
Tips From HACOS
Be serious about the Form and fill in carefully especially open an individual account!
3
How Can We Deal With It?
HACOS heartfelt message to all of you is: run your own business legitimately as well as compliantly.
● When in procurement with vendors, remember to ask for invoices/Fapiao(发票).
● When in transactions, try not to use your personal account.
● In addition, you can establish an HK company to run your business in accordance with tax administration and standardization.
It means that although you use your HK account to deal with payments, you should well preserve the documents and contracts during the transactions.
Under CRS, HACOS persists in providing same and good quality services, remains vigilant at all times, promises to provide latest and timely information for our customers!
HACOS,Business Services Solutions Master
