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China: First AEOI exchange with Switzerland set for September 2019

China: First AEOI exchange with Switzerland

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.


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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

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