These People Will Be Affected By The CRS！CRS来势汹汹，这5类人影响最大！
As is known to all, the CRS policy proposed by Organization for Economic Co-operation and Development ( OECD ).
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As of Aug 7, 2018, there are now already over 103 international countries (regional) have signed the “Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information”, with next exchanges between these jurisdictions set to take place this Sep.
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China Mainland, Hong Kong, and Macau started the first information exchange this month, have you started to understand CRS yet?
CRS information exchange era
CRS (Common Reporting Standard), “Unified Reporting Standard” for the automatic exchange of tax information in financial accounts around the world, which aims to promote the Automatic Exchange of Tax Information between Countries, and is now gradually implement in various countries, it is expected to cover all member states completely in 2018.
CRS (Common Reporting Standard),及全球范围内金融账户涉税信息自动交换的“统一报告标准”，其本质主要就是反避税， 旨在推动国与国之间税务信息自动交换，目前正循序渐进地在各国实施，有望在2018年完全覆盖所有的成员国。
Information exchanged includes
Overseas institutional accounts: almost all overseas financial institutions, including banks, trusts, brokers, law firms, accounting firms, investment entities that provide various financial investment products, and specific insurance institutions.
Asset information: deposit account, escrow account, cash-only fund or insurance contract, annuity contract.
Personal information: your account, account balance, name, date of birth, age, gender, place of residence.
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The jurisdictions that have exchanged information in 2017, including more than 50 Countries, involved 500,000 offshore assets being disclosed, Sweden recovering taxes of 3.3 billion euros, Australia recovering taxes of 4.59 billion Australian dollars, and France recovering taxes of 1.85 billion euros. Europe has generated an additional tax of 85 billion euros.
What about CRS in China?
On the one hand, China will complete the information exchange with the other jurisdictions participating in the CRS for the first time before Sep 30, 2018. In the following years, the information exchange between the jurisdictions will be carried out regularly.
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On the other hand, China will complete the due diligence process for all stock clients and identify non-resident accounts before Dec 31， 2018.
Who will be affected?
Chinese, Overseas Bank Accounts have money
People in China, but some of the money in Overseas Financial Accounts such as Canada/Hong Kong (CRS signatory countries or regions), your financial information will be fed back to China. When it is officially implemented, it may be required to pay taxes.
Shareholder, the company has business Overseas
If you hold more than 25% of a company’s equity and the company has an Overseas Account at the CRS contract, the account details will be exchanged to China.
People who hold stocks overseas and buy insurance
Chinese people hold stocks of listed companies through overseas securities companies, or purchase valuable insurance or annuities overseas. These financial assets information will be reported to China, and the Chinese tax authorities will act as appropriate.
Foreigner, working in China and opening a bank account
Foreign individuals work in China and open a financial account. If the country where their nationality are located in also a CRS participating country, China will send his financial account information to his country.
Person who built an offshore family trust
If the trust is located in the CRS signing place, the information will be shared with China, such as the consignor, trustee, beneficiary of the overseas trust, and the Chinese who ultimately control the trust.
How to avoid the loss of your assets?
Recently, Boston Consulting Group (BCG) released the Global Wealth Management Report 2018 after investigating financial markets in 97 countries and regions around the world. According to the survey, there are about 8.2 trillion US dollars of offshore wealth in the world, and Hong Kong ranks second with 1.1 trillion US dollars.
近日，波士顿咨询（BCG）在调研了全球 97 个国家和地区的金融市场后，发布《全球财富管理报告 2018》。调研显示，全球约有 8.2 万亿美元离岸财富，香港以 1.1 万亿美元排第二。
In addition, according to an article by Bloomberg at the beginning of this year, China’s richest people hold about 5.3 trillion US dollars of assets, and more than half of the funds are stored Hong Kong.
另据彭博社在年初的一篇文章显示，中国富豪持有大约 5.3 万亿美元资产，过半资金存放在香港。
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If you hold more than 25% of the shares of a company other than your nationality, such as a Hong Kong company, please keep all business related invoices, bills of lading, receipt vouchers and other information, as well as make timely accounts every year, hire a professional Auditor to produce an Audit report, and submit these information to the Hong Kong Tax Bureau Office to complete the company’s tax declaration.
Failure to submit an audit report on time will result in a fine or be summoned to the court, and severe cases will be blacklisted.
If you hold a private account that is not your nationality, please answer the call from the account manager in time and complete the declaration.
If you are not sure whether you are affected or want to know more about proper handling, please contact our professional consultants and we will customize your personal solution.