The invisible rich panic: overseas assets to worry about retroactive exposure

Hongkong Wang Fang underground USA

zhongzhengwang· 2017-08-06 11:03:27

Beijing Dacheng Law Firm family office team leader Wang Fang, recently often encountered anxiety and even panic customers. A speech

2017 in July after a more than 50 year old woman backstage and asked her: "I the configuration of the 150 million financial assets in Hongkong, how should I do?" her money is out of the underground, Wang Fang heard her speech gripped with sweat, hate not immediately fly to Hongkong to the disposal of assets".

this lady's panic comes from the Chinese version of "CRS" (commonreportingstandard). At present, 100 countries around the world have implemented CRS, aims to realize the information transparency of transnational tax residents' financial accounts, for tax evasion, money laundering and corruption of overseas assets to hide.

in the country, the first to investigate the total balance of accounts over $1 million of high net worth customers. For these rich people, the tax comes next, their biggest concern is the disclosure of their overseas wealth and the ensuing liquidation of the funds against the sea.

how much of these overseas assets? "It's a mass that you can't imagine, and CRS is like a box full of gold and jewels coming up from the basement.". "Wang Fang said.

1 and CRS come,

simply speaking, is fishing for "big fish", after a year to catch "small fish."".

2017 in the evening of May 23rd, the State Administration of Taxation, the Ministry of Finance and the "three" and six ministries jointly issued the "non resident financial account information related due diligence management measures" (hereinafter referred to as the "measures"), Chinese mainland started from July 1st, known as the Chinese version of "CRS" legislation.

the "measures" provides that banks, securities, trust, futures, insurance companies and other financial institutions to carry out due diligence investigation of non resident financial accounts. The concept of "non resident" refers to the individuals and enterprises other than the residents of the Chinese tax.

determines whether the standard of tax residents is not only overseas identity, but also includes address, telephone number, account and so on. That is to say, the concept of "tax resident" is more rigorous than identification, and includes traces of personal residence.

for a new account, the financial institutions at the time of registration to distinguish whether non residents; for both accounts, required to complete the high net worth clients before December 31, 2017 (before June 30th accounts total balance of more than $1 million) of the survey, the completion of the investigation of low net worth clients before December 31, 2018. In short, it is fishing for "big fish" and fishing for fish a year later".

for the stock of non resident institutional accounts, to complete due diligence accounts total balance of more than $250 thousand account before June 30th, without the survey below this amount. The name, holders of

need to aggregate information including non resident account current address, tax resident country (region), the taxpayer identification number, date of birth, place of birth; single account, financial account balances, interest, dividends, etc..

2017 years before December 31st, financial institutions registered in the State Administration of Taxation website, and in May 31st submitted before the due diligence information annually. After obtaining the information, the State Administration of Taxation will exchange information with the residents' tax authorities in the account holder. The first foreign exchange information was in September 2018.

, for example, for example, one person saved $ten million at a bank in Hongkong in the early years. Prior to this, the mainland is not aware of the money, but after the implementation of CRS, because he is mainlanders, living in the mainland, inland tax residents, tax information must be transmitted back to the mainland.

the bank through the computer screen, you will find he is with a permit to open an account, the account will give Shanghai tax resident identification mark, the account information and other non resident account information after the summary to the Hongkong tax bureau. In September next year, the Inland Revenue Department in Hongkong will send it to mainland tax authorities to exchange information about Hongkong clients with the mainland.


and international standards of foreigners in the overseas possession of assets in order to avoid up to 40% of the estate tax; Chinese more assets, for their children to study abroad, property or the unknown source or origin.

, an international tax practitioner, has worked in Switzerland, tax havens and London for many years, and has worked full-time on CRS. He told the Southern Weekend reporter that the CRS, which had just attracted domestic attention, began in Britain and other places in 2014.

the earliest thing in the world to do this was the United states. In 2010, the United States enacted the "overseas account tax compliance act" (FATCA), requiring foreign financial institutions to the IRS report US tax residents (including U.S. citizens and green card holders) account information, or foreign financial institutions in particular income received from the United States will be punitive withholding 30% withholding tax. According to Colin

explained, after Spain, France and Italy, Germany and Britain and other European countries signed the agreement with the United States, that this system is good, hope can also engage in a similar multilateral mode, "EU countries are in favor of doing so, OECD (Organization for economic cooperation and development) to engage in a global edition. Unified reporting standards, is CRS, FATCA simplified".

2014 July, OECD release CRS. Later, the G20 summit wanted to push it all over the world, with 100 countries joining in two.

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