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 a rule 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.

The people 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, several sources familiar with the matter said.

The Chinese Tax Administration has not yet responded to the above information.

The tax reflects the Chinese government’s growing urgency to expand revenue sources amid a sluggish property market and slowing economic growth, and is in line with President Xi Jinping’s “shared prosperity” policy aimed at creating a more equitable distribution of the country’s wealth, multiple sources said.

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 sweeping, years-long campaign to control and regulate key economic sectors, including finance and real estate.

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

United Nations figures also show that 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