China’s tax authority is scheduled to start collecting financial wealth information about Chinese taxpayers early this year. This step has been taken by the tax authority to decrease the proportion of Chinese taxpayers who avoid paying taxes on foreign assets. The wealth data collected will include financial accounts, insurance as well as investments such as trust funds. Data collected by China’s tax authority will be exchanged with other markets which fall under the G20 Group under the Common Reporting Standard (CSR) legislation. Under this agreement, members must exchange information concerning tax and financial accounts. China will first exchange this information in September 2018.
According to RFi Group data, this move will likely have considerable impact on the affluent with about 34% affluent banked consumers in China already holding at least 1 offshore banking product and 58% anticipated to require international banking services over the next 12 months. This regulation which will increase transparency and discourage tax avoidance through offshore financial accounts could potentially decrease the level of overseas banking products ownership among the wealthy Chinese.
Source: RFi Group – China Priority and Retail Banking Council (H2 2016)