Bloomberg: China collects taxes from the super-rich

China's super-rich could face taxes of up to 20% on foreign investment profits - Photo: CNBC

Bloomberg news agency reported on October 15 that China's super-rich are facing taxes on overseas investment profits, a tax that the government has long ignored.

In recent months, some wealthy individuals in major Chinese cities have been asked to self-assess or summoned by tax authorities to assess potential tax liabilities, including tax debts from previous years.

These individuals could face taxes of up to 20% on foreign investment profits, plus additional penalties if these payments are overdue.

Although the country has long had regulations requiring citizens to pay tax on their worldwide income, including investment profits, this has rarely been implemented until recently.

It is not yet clear who this tax will apply to and how long it will last.

Those targeted on the tax list are individuals with at least $10 million in overseas assets, or shareholders of companies listed in Hong Kong and the United States, sources familiar with the matter said.

The Chinese Tax Administration has yet to respond to the above information.

Multiple sources said the tax reflects the Chinese government’s growing urgency to expand revenue sources as the property market remains sluggish and economic growth slows. It also fits with Chinese President Xi Jinping’s “shared prosperity” policy aimed at creating a more equitable distribution of the country’s wealth.

China is now facing an economic slowdown as fiscal revenue in the first eight months of 2024 fell 2.6% year-on-year, while government land sales revenue also fell 25% to 2 trillion yuan.

At the end of September, policymakers in the country of one billion people announced a series of measures to stimulate the economy.

China's super-rich have been under scrutiny since Chinese President Xi Jinping launched a wide-ranging, years-long campaign to control and regulate key economic sectors, including finance and real estate.

Boston Consulting Group estimates that in 2018, when China was experiencing a billionaire boom where a new billionaire was created every few days, about $1 trillion of China's $24 trillion in personal assets was held overseas.

UN figures also show China has seen a surge in wealthy migration, with more than 1.2 million citizens leaving the country since 2021.

Source: https://tuoitre.vn/bloomberg-trung-quoc-truy-thu-thue-gioi-sieu-giau-20241015171852678.htm