All Offshore Offshore Accounts Will Be Cleared In January 1, 2017.

"One person will pay taxes and the whole family will be honored!" China will check all offshore offshore accounts from January 1, 2017.

People who have investments and assets abroad must be shocked.

Pinch your fingers, and it's been over for more than a month. Don't think Xiaobian is alarmist. It's true! Don't believe it! Look down!

Quite a lot

Enterprises and freight forwarders will set up offshore offshore accounts. On the one hand, they can facilitate the pfer of funds, and on the other hand, they can achieve tax evasion and tax avoidance.

However, the State Administration of Taxation has issued relevant management measures recently. It will check overseas accounts from January 1, 2017 and pay close attention to offshore accounts.

In October 14th, the State Administration of Taxation issued a "management method for due diligence investigation of tax related information on non resident financial accounts" on the official website.

The deadline is October 28th.

At present, the deadline for this opinion has arrived, and no changes have been made in the management measures, which will be formally implemented in January 1, 2017.

Event background

In September 2016, at the G20 level, our country promised to implement the automatic exchange standard of financial account information (G20), which was commissioned by the OECD, which is entrusted by the OECD (CommonReportingStandard). It aims to increase tax pparency through strengthening global tax cooperation and crack down on the use of overseas accounts to evade taxation.

Therefore, it is not our country's inventory.

At present, 101 countries in the world have joined the CSR, and each country will share the financial account information of a company or individual separated from the place of operation.

More than 50 countries (regions) promised to conduct the first exchange of information in 2017, and implemented a new account opening process in January 1, 2016.

It is noted that the commonly used British Vilgin and Cayman Islands were the first to join, and the new account opening process was implemented in January 1st 16.

Therefore, the formalities are more complicated now.

Date of implementation

According to the above table, China is the second batch to join. Its timetable is as follows:

(1) financial institutions in China will perform their due diligence procedures in accordance with the "standards" from January 1, 2017 to identify non resident individual and enterprise accounts opened in this institution, collect and submit relevant information of the accounts, and exchange information with the other countries (regions) tax authorities on a regular basis with the State Administration of taxation.

(2) it is expected that the inventory of individual high net worth accounts (up to December 31, 2016, with a total balance of more than 6 million yuan in December 31, 2016) will be completed before December 31, 2017.

(3) China's first time to exchange tax information on non resident financial accounts for the first time is September 2018.

Correspondingly, the countries and regions that have joined the information exchange system will also submit overseas financial information concerning Chinese tax residents to China in September 2018.

At that time, how much assets you have at home and abroad and how much tax should be paid will be clear at a glance.

Which account information will be exchanged?

For a company account, we need to see whether a company is a positive type or a negative one.

If a company is a negative income type company (more than 50% of the investment income), the controller should be the object of information exchange.

The controller should be judged on the recommendations of the financial action task force on money laundering.

In addition, there is no threshold for the existing personal accounts; that is, regardless of the amount, they are in the scope of intelligence exchange.

For existing company customers, the amount below 250 thousand dollars can not be in the scope of information exchange.

For newly opened personal or company accounts, no matter what the amount is, they need to exchange information.

In addition to the balance, it also includes interest income, dividend income, insurance product income and paction income of related financial assets.

Of course, there are a series of basic information about the account: name, date of birth, country and so on.

The total amount paid to or credited to the account is exchanged.

Common problem

The "management measures" is a means to strengthen cross border tax source management among countries (regions). The object of restraint and attack is individuals and enterprises that use offshore accounts to evade taxes.

For taxpayers who deliberately conceal their income and evade their tax obligations, our tax authorities can verify the tax related information provided by other countries (regions).

The real income from abroad shall be subject to tax collection and punishment if the income is not declared and paid according to the regulations.

What types of overseas institutions accounts are covered by CRS?

Deposit institutions: all kinds of banks or similar institutions that take deposits.

Trusteeship: if the institution holds financial assets for others, and the related income of financial assets and services exceeds 20% of the total income, that is, it is in conformity with the CRS's determination of the trustee organization. The time is based on the past three years, and if the institution survives less than three years, the duration of stay will prevail.

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Investment entity: if an institution has been in the past three years (the remaining time is less than three years with the duration of stay), the main economic activities (the related income exceeds 50% of total income) will be identified as "investment entity" for the customer or the representative customer to perform one or more of the following businesses.

1) trading currency market instruments (cheques, bills of exchange, certificates of deposit, derivatives, etc.); foreign exchange; exchange rate, interest rate, index instruments; negotiable securities; commodity futures.

2) personal and collective portfolio management.

3) invest and manage financial assets on behalf of others.

If an institution is subject to the professional management of investment entities stipulated by other CRS agreements, depository institutions, specific insurance companies, and the income derived mainly from the investment, reinvestment and paction of financial assets, it will also be recognized as "investment entity".

Specific insurance institution: an insurance company or holding company engaged in insurance and annuity business with cash cancellation value.

It should be noted that if an investment institution is established in a non CRS participating country, such entities should be classified as passive passive financial institutions.

When such institutions are associated with financial institutions of CRS participating countries (for example, bank holding accounts in CRS participating countries), negative non-financial institutions will be required to provide information about the actual controller.

Is the overseas policy part of the information exchange?

Yes.

For countries (regions) that are included in CRS, such as the more common Hongkong, serious illness insurance and regular life insurance are not in the scope of declaration, and life insurance is in the scope of declaration.

Can shell companies evade CRS?

CRS declaration requirements can not be circumvent.

If the holder of the relevant account is not a natural person, but the other entity (legal person or partnership), the entity needs to be "penetrated" to find out the actual controller behind it.

For the "trust", the trustee, the beneficiary and other persons who have effective control over the trust need to declare.

All in all, with China's accession to the CRS.

All companies and individuals, if they have overseas assets, whether they are bank deposits, or insurance, certificates, trusts, futures or funds and all other assets, need to pay taxes to the country where their tax residents live.