Submitted by Investing in Chinese Stocks
The top story in the finance section in China on Tuesday morning is about the Chinese government’s hunt for hidden assets (and unpaid taxes) overseas.
The article mentions Australia and New Zealand freezing accounts from customers who don’t identify if they are foreign taxpayers. It goes on to say many of the frozen accounts belong to Chinese residents, warns that more account freezes are coming and that in September, the Australian and New Zealand governments will begin sharing information with China’s tax department.
“The poor cut meat and pay taxes, and the rich have tax avoidance” has long been criticized. However, from now on, the tax haven that hides the wealth of the rich may no longer exist.
Since this month, China has exchanged CRS (Overseas Financial Accounts Common Declaring Guidelines) information with other countries for the first time. The Chinese tax authorities will grasp the personal overseas income. Once they are listed as high-risk taxpayers, they face a huge review of the source of funds. It is also necessary to pay a large amount of personal income tax.
In addition, the revised personal income tax law for the first time to establish anti-tax avoidance provisions will give the Chinese tax authorities a strong legal basis. In short, China’s crackdown on the international tax haven is officially open, and the invisible rich will have nowhere to go.
A large number of Chinese accounts in Australia and New Zealand have been sealed.
As early as more than a month ago, foreign media released major news. New Zealand and Australia’s major commercial banks froze thousands of accounts and asked whether the account holders belonged to foreign taxpayers, including a large number of Chinese residents.
Referring to this news from July: Kiwi banks freeze hundreds of accounts, figure likely to stretch into thousands
New Zealand banks are set to freeze thousands of accounts for people who have yet to respond to requests to confirm whether they are foreign taxpayers.
Under new legislation, financial institutions must find out whether their customers are tax residents of other countries and report the details of those who are to the Inland Revenue by June 30 each year, starting this year.
Back to the iFeng story:
A spokesperson for Australian state-owned Kiwibank said the bank sent letters to about 3,000 customers at the end of May and gave customers a 14-day period to supplement their overseas tax status information.
ANZ, Australia’s largest bank, said it had frozen about 200 customers’ accounts in a week and will continue to freeze accounts every week, as required by tax laws. Westpac and BNZ also did the same.
In fact, as early as the beginning of June, New Zealand media released news, if you do not provide foreign tax information, Bank of New Zealand will freeze your account. From July 1st, the bank has not yet completed the overseas arrears in accordance with the regulations of the bank, and all accounts are frozen. No one can be an exception. Of course, the funds in the frozen account will remain in the account, but the customer will not be able to access it.
At present, the banks of Australia and New Zealand have frozen thousands of accounts, and the scope will continue to expand.
It is worth mentioning that China, Australia and New Zealand are all on the list of information exchanged for the first time in September this year. Basic information about all non-Australian residents who open an account in Australia, such as name, ID number, address, birthday, account number, account balance, and major transactions that occur each year, as well as bank deposit accounts, escrow accounts, insurance contracts, etc. Information will be shared by the tax bureaus of China and Australia.
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Author: Tyler Durden