Exchange Of Financial Account Information For Tax And China's Countermeasures

In recent years,with the quickened integration of international economy,it is common to allocate capital globally.High net worth individuals(HNWIs)from all over the world used overseas financial institutions account to invest overseas real estate,stock equity or other financial assets,and hiding incomes to illegally evade their tax obligations.After the financial crisis in 2008,the international economic recovery was slow.Considering the potential tremendous significance in increasing fiscal revenue,some governments gave major support to crack down International tax-dodging.The major economies supported the strengthening of international tax collection and management cooperation.In 2010,the United States Congress passed the Foreign Account Tax Compliance Act(FATCA),asked overseas financial institutions to provide financial information directly to the US government,and that overseas financial institutions failed to fulfill their obligations on time would be levied high withholding income tax.Due to threatening the sovereignty of other countries,the FATCA has been opposed by many countries.After several revisions,the Act came into effect in 2014,and in accordance with the plan,the FATCA would be gradually implemented within three years.In 2011,the EU adopted the Directive on Administrative Cooperation in Taxation,which established all the necessary procedures for better cooperation between EU tax authorities,including the exchange of information,spontaneous exchange,automatic exchange,administrative investigations participation,simultaneous control,mutual notification of tax decisions,and secure electronic systems for information exchange.However,the financial account tax-related information exchange is an international action,and it is difficult to achieve the desired results just relying on a single country.In July 2014,the OECD issued the Standard for Automatic Exchange of Financial Account Information in Tax Matters(AEOI),which is designed to combat cross-border tax evasion and maintain normal tax revenues.Countries have expressed their willingness to participate in the tax-related information automatically exchange.China is also committed to the implementation of the standard,and the current work is constantly advancing.The State Administration of Taxation(SAT)issued the Measures for the Administration of Due Diligence Information on Non-resident Financial Accounts(Draft for Soliciting Opinions)October 14,2016.It is expected that due diligence investigations for accounts will be conducted since 2017 and the first information exchange is expected to be completed by 2018.Because of lack of experience,how to conduct a highly efficient tax-related information exchange is a great challenge the SAT,especially in the financial account information exchange field.In recent years,China has changed from net capital investment to net exporting countries.High net worth individuals invest overseas,and the scale of holding assets is very impressive.The demand for overseas tax benefits is further expanded.In particular,in recent years,China has changed from net capital importer to net capital exporter.High net worth individuals invest overseas,and the scale of their assets and income is very impressive.China need to maintain national tax interest.Therefore,it is necessary to discuss how to occupy the high ground in international rule-making under the current international situation,to utilize the new standards to protect the interests of national tax,and to carry out financial account Tax-related information exchange effectively.This paper is entitled "financial account tax-related information exchange development and China's countermeasure ",and mainly divided into the following parts:The first part is the introduction,mainly introduces the background,purpose and content of the paper,and summarizes the research results of the relevant scholars.The second part is the financial account tax-related information exchange overview.This chapter discusses that the financial account tax-related information exchange is the special and key field of international tax information exchange,and introduce the definition,theoretical basis and models.The third part is the development process of the financial account tax-related information exchange,which simplifies the development of the financial account tax-related information exchange system,including the achievements from major international organizations and economic forums,the relevant systems of the United States and the European Union,and China's participation and contribution to financial account tax-related information exchange system construction.The fourth part is the main resistance of the financial account tax-related information exchange and the current situation of the domestic system operation.The paper discusses the conflict and reconciliation between the bank's confidentiality,the financial privacy right and the tax-related information exchange.It summarizes the financial information exchange status quo quo and the main problems.The fifth part is " Exchange of Financial Account Information for Tax and China's Countermeasures",focusing on how to improve relevant laws.