China Tax/Business News Flash

May 2017, Issue 19

China completed domestic CRS legislation: new requirements effective from 1 July 2017

Recently, the State Administration of Taxation (SAT) and Ministry of Finance (MOF) together with the People’s Bank of China and three commissions jointly issued the Administrative Measures on Due Diligence Procedures for Non-residents’ Financial Account Information in Tax Matters (the Measures), which signifies that the Common Reporting Standard (CRS), i.e., the international obligation of automatic exchange of financial account information (AEOI), is officially being implemented in China.  The Measures has made some modifications and clarification to the Discussion Draft released by the SAT earlier in October 2016 and uses the Tax Collection and Administration Law and the Anti-money Laundering Law as legal support to enhance the enforcement and promote its smooth implementation.

According to the Measures, the reporting financial institutions (FIs) shall conduct due diligence on financial accounts commencing from 1 July 2017. Given the tight timeline, it is advisable that FIs shall start preparation as soon as possible in order to meet the compliance requirements, especially for high value preexisting individual accounts.   

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