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Hong Kong, Switzerland, United Arab Emirates and other "tax havens" close offshore accounts

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Hong Kong, Switzerland, United Arab Emirates and other "tax havens" close offshore accounts

[Abstract]:
InastatementonOctober10,EUfinanceministersagreedtoremovecountriessuchastheUnitedArabEmiratesandSwitzerlandfromtheEU'slistoftaxhavens,Reutersreported.HongKongwillalsocloseitsoffshoreaccountsonalargesca

In a statement on October 10, EU finance ministers agreed to remove countries such as the United Arab Emirates and Switzerland from the EU's list of tax havens, Reuters reported.

 

Hong Kong will also close its offshore accounts on a large scale by the end of November. (See the article for details: The offshore account may be subject to another large-scale withdrawal before the end of November! The world is becoming more and more transparent, and it is very dangerous to rely on loopholes to find opportunities. For those who are determined to avoid taxes or businesses, the mobility space is gradually shrinking. With the gradual development of CRS, global information transparency is the trend of the times. Some enterprises, financial institutions and invisible rich should make a sweat for themselves. Because ultimately, there will be no tax haven on Earth.

 

 

Reported that at a meeting in Luxembourg, EU ministers decided to remove the United Arab Emirates from the EU blacklist and the Marshall Islands from the list. In addition, Switzerland, the EU's main economic partner, was also removed from the grey list. The list covers countries that have pledged to change tax rules to meet EU standards.

 

According to the announcement issued by the official website of the Swiss Federal Tax Administration on October 5, 2018, according to the AEOI standard of automatic exchange of tax-related information in financial accounts, the agency exchanged finance with tax authorities of other countries (EU countries plus nine other countries and regions: Australia, Canada, Guernsey, Iceland, Isle of Man, Japan, Jersey, Norway and Korea) at the end of September. Account information, for the first time in history.

 

 

According to media reports, in 2017, the European Union published a blacklist and grey list of tax havens. The countries listed on the list refer to jurisdictions that do not cooperate with the European Union in tax matters, while companies and rich people in other countries tend to avoid taxes in these countries. There are still more than 10 countries or regions on the remaining blacklist, including American Samoa, Guam, the United States Virgin Islands, Belis, Dominica, Fiji, Oman, Samoa, Trinidad and Tobago and Vanuatu; the European Union removed Switzerland from the grey list on October 10, and Switzerland has now pledged to amend its tax rules and comply with them. Follow EU standards. Switzerland passed tax reform last year, and the new tax law will come into force in 2020, which meets the requirements of the European Union. In addition, Albania, Costa Rica, Mauritius and Serbia will also be removed from the grey list. The grey list still includes dozens of jurisdictions in the world, such as the Cayman Islands, the Bahamas and Bermuda. Most of these jurisdictions are world-renowned tax havens. According to regulations, if these countries or regions fail to meet their commitments within the prescribed time limit, they will be transferred to the blacklist.

 

What is CRS?

 

CRS is the global version of FATCA, no one can give up customers on earth, so CRS will bring further improvement of compliance standards. CRS (Common Reporting Standard), which is one of the contents of "Automatic Exchange Standard of Tax-related Information in Financial Accounts" (AEOI Standard) issued by OECD in July 2014, aims to combat cross-border tax evasion and maintain integrity of the tax system. Currently, 104 countries and regions have joined CRS.

 

Simply put, CRS is to enhance tax transparency and combat cross-border tax evasion by participating in the exchange of tax residents'data between countries and regions. CRS corresponds to only one standard, and all countries will implement it in the form of their own laws and regulations. More simply, the automatic exchange of tax-related information in financial accounts means that countries (regions) exchange tax-related information in financial accounts with each other. Firstly, through due diligence procedure, financial institutions in Country A (region) identify the accounts opened by tax residents and enterprises in Country B (region), and submit information such as account holder's name, taxpayer identification number, address, account number, balance, interest, dividend and income from the sale of financial assets to the competent authorities in Country A (region).

 

 

Then, the tax authorities of country a (region) and the resident country of the account holder, that is, the tax authorities of country B (region), carry out information exchange, and finally provide information support for the cross-border tax source supervision of countries (regions).

 

According to OECD official website information, 104 countries (regions) have signed the Agreement between Multilateral Authorities on Automatic Exchange of Tax-related Information in Financial Accounts. Among them, some countries (regions) exchanged information for the first time in September 2017, including Bermuda, the British Virgin Islands, the Cayman Islands, Luxembourg and other "tax havens"; while mainland China, Hong Kong, China and Macao all exchanged information for the first time in September 2018, in addition, Singapore, Bahamas, Bahrain and other countries and regions, totaling 47 countries and regions.

 

Background of China's accession to CRS - Due to legal environment and foreign exchange control, it is not common for foreign enterprises or individuals to use offshore accounts to evade taxes in China. However, the significance of China's participation in CRS lies not only in the promotion of international tax and financial status, but also in the fight against the use of overseas accounts to conceal assets and even money laundering.

 

This means that these tax havens also need to exchange the account information of our taxpayers who open accounts there to our tax authorities when we hand over the relevant information of non-resident accounts in our country. As a result, CRS will make it impossible to avoid tax by opening offshore accounts in "tax havens".

 

According to the State Administration of Taxation, taxpayers who intentionally conceal their income and evade their tax obligations are taxed in China.China's tax authorities can verify the true income of taxpayers outside China based on tax-related information provided by other countries (regions) in financial accounts and impose penalties on incomes not declared and taxed in accordance with regulations.