Those who have been or is about to be involved in illegal activities, such as account opening for illegal money, money laundering or tax evasion in Tax Haven, will soon get into trouble as the CRS will be put into effect in China from Sep. and new anti-tax avoidance clauses were added into personal income tax last week, which may hit the act of off-shore tax evasion hard!
Image | Google
The First CRS Information
Exchange in China
You have probably heart about relevant introduction about CRS and we have introduced it before.
#Click the link below to learn more
These People Will Be Affected By The CRS！CRS来势汹汹，这5类人影响最大！
© Image | Google
It's worth noting that information exchange will be based on the identity of tax resident instead of nationality when CRS takes effect in China.
Anti-tax Avoidance Clauses
Added Into Personal Income Tax
For the First Time
Recently, revised Personal Income Tax Law was ratified by NPC Standing Committee and is about to be put into effect from January 1 of next year, and anti-tax avoidance clauses are added for the first time.
Tax authority has the right to adjust tax with reasonable methods when one of the following situations takes place:
Business between individuals and related parties violates the Arm's Length Principle and has no proper reasons
Enterprises controlled by individual residents or by individual residents and resident enterprises jointly in countries (areas) with relative low actual tax burden has no necessary and reasonable operation, profit that belongs to individual residents will not be distributed or will be reduced.
Individuals start business with unreasonable purposes to gain improper tax benefit.
Tax authority makes adjustment to tax based on previous clauses, impose overdue tax and interest.
Individuals Added Into
Anti-tax Avoidance System
For a very long time, China income tax has been focusing on enterprises and related anti-tax avoidance measures have been aiming at legal representatives. But this anti-tax avoidance means relevant individuals’ tax avoidance behaviors are also added into anti-tax avoidance system.
It was reported by overseas media that a month ago, commercial banks in New Zealand and Australia have blocked thousands of accounts and investigated if the account holders are foreign taxpayers or not, and most of them turned out to be Chinese residents.
Image | nzherald.co.nz
For those who want to buy foreign passports or establish off-shore companies to evade tax, hide illegal fortune or even participate in money laundering, CRS and new personal income tax put an end on their good days.
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Ref | 央视新闻, 中国证券报
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