Local Chinese authorities have stepped up efforts to collect taxes from citizens with unreported overseas income, urging them to remain compliant as the country refines its taxation system and local governments seek to broaden revenue streams.
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At least six tax authorities – including city-level administrations in Shenzhen, Beijing and Xiamen, along with provincial-level bureaus in Guangdong, Fujian and Sichuan – said they had used big data analysis to identify individuals who failed to report overseas income. They reminded taxpayers to make proper declarations.
The authorities also flagged several instances of noncompliance. A taxpayer in Xiamen, surnamed Fu, was ordered to pay nearly 7 million yuan (about US$985,500) in overdue taxes and penalties, while another in Sichuan, surnamed Li, was forced to repay close to 6.7 million yuan.
In Guangdong, a taxpayer, surnamed Liu, was instructed to pay 1.7 million yuan, while in Fujian another was ordered to repay about 5.6 million yuan.
“Taxpayers should promptly correct any mistakes in prior tax return filings, particularly underreporting or omissions, to mitigate tax-related risks,” according to statements issued by all six local authorities on Tuesday.
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Tax authorities said they would issue reminders or arrange interviews to warn noncompliant individuals, adding that those who refuse to comply may face investigations and penalties in accordance with the law and that serious violators would be publicly named.
We cannot rule out that the increased enforcement is also linked to fiscal difficulties