The first exchange of information under the automatic exchange of information (AEOI) between China and Switzerland will take place in September 2019 regarding the year 2018.
Taxpayers in China who might want a solution for undeclared funds or income will find that China does not have specific tax amnesty or voluntary disclosure programs for undeclared income and assets. Accordingly, non-compliant taxpayers must pay their taxes due—including interest and possibly penalties—as determined on a case-by-case basis. Also, a criminal prosecution might be launched.
In practice, the Chinese tax administration welcomes and accepts taxpayers who come forward to disclose voluntarily any tax non-compliance and settlement of any unpaid taxes (even though there is no formal process currently in place).
In China, amendments to the individual (personal) income tax law (effective 1 January 2019) introduced a general anti avoidance rule (GAAR) for individuals and granted authority to the tax administration to assess tax on individuals who are involved in tax avoidance transactions using offshore tax havens. With the assistance of the common reporting standard (CRS) regime, Chinese tax authorities will be able to obtain sufficient information of Chinese taxpayers and effectively implement the GAAR, especially for high net-worth individuals.
Read a January 2019 report prepared by the KPMG member firm in Switzerland
© 2019 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.