4 days later, tax bureau will start to examine all Chinese bank accounts. That means, Those foreign trade enterprises, which use individual or offshore accounts to conduct transactions, should pay more attention to the new tax policy!
Tax declaration with invoice
In recent years, since “the 3rd China Taxation Administration Information System” have been promoted, tax bureau has been controlling the tax mainly by invoice.
Generally, 90% of tax risks come from tax payment appraisal and routine tax investigation by tax authorities according to enterprises’ invoices and receipts during transactions.
Therefore, invoice is not only crucial for tax declaration by enterprises, but also for the supervision by tax bureau!
No more tax evasion
via individual accounts!
Under such strict tax policy, you may wonder that if you do not keep any account record or issue invoice, can you escape from the tax investigation?
The case shows that there is no way to evade tax via individual account any longer, especially from January 1st in 2018!
Chinese banks will cooperate with tax bureau so as to strengthen tax supervision on individual and corporate accounts!
No more tax evasion
via offshore accounts!
You may come up an idea: no more individual account, then why not offshore account, so that I can escape from supervision by Chinese local tax bureaus?
The truth is, under CRS, that idea won’t work any more! What’s more, Chinese government will exchange tax information for the first time with other CRS member countries from September in 2018.
What is CRS?
Notice! CRS Affects Everyone Of Us!
Specifically, according to CRS, Chinese government will submit tax status of foreigners who live in China back to their local countries.
It means, not just Chinese, but foreigners, as long as they live and do business in China, their tax status will become completely transparent home and abroad!
Even if the Swiss Bank Corporation, known as the most privacy-keeping bank, has also announced that the bank will submit their foreign customers’ account information in accordance with laws.
See, mutual exchange of tax information makes it impossible for tax evasion.
● January 1st, 2018
Financial institutions in mainland China started to conduct the necessary due diligence.
● Before December 31st, 2017
Necessary due diligence to investigate individual financial accounts (with total account balance more than 6 million RMB by the end of 2016) is finished.
● September, 2018
Chinese government will begin to exchange tax information of non-resident financial account with CRS countries.
● Before December 31st, 2018
Necessary due diligence to investigate individual financial accounts (with total account balance less than 6 million RMB) as well as all corporate accounts is finished.
The day when the policy began to come into effect makes it impossible to evade tax by transfering payments via individual or offshore accounts.
Once it is caught by the government, numbers of penalties and overdue fines will be waiting for you. Worse still, there may be a criminal punishment!
Under the new tax policy,
Don’t even think about it!
HACOS,Business Services Solutions Master