When Banks Meet Tax Authorities — Key Issues that Lawyers Should Know About Tax Administration in the New Finance Era (I)

• Author: Bill Ye,Jessie Yu,Mona Lan
• Published date: 09/03/2017
• Citation: jd0238
• Date: 09 March 2017

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CHINA LAW INSIGHT

When Banks Meet Tax Authorities — Key Issues

that Lawyers Should Know About Tax

Administration in the New Finance Era (I)

By King & Wood Mallesons on March 9, 2017

By Bill Ye , Jessie Yu and Mona Lan King & Wood Mallesons’ Commercial &

Regulatonry group

In February, the Measures on the Due Diligence of Non-resident Financial Account

Information in Tax Matters (draft for comment) (hereinafter referred to as “the Measures”)

issued by the State Administration of Taxation (“SAT”) has attracted the attention of many

high net worth individuals in China. This series of articles will canvas interpretation of the

Measures in a systematic way and potential responses.

In the first place, it should be remembered that this is a tax matter in nature. Along with

the development of an international economy and trade as well as increasing

globalization, more and more taxpayers conduct cross-border transactions by using

offshore financial accounts and these accounts have become important information

sources for tax regulation. However, it is usually impracticable for tax authorities to collect

information about such accounts.

Against the background of the OECD’s Base Erosion and Profit Shifting (“BEPS”) action

plan, in order to tackle the information asymmetry problem in international tax regulation,

the Group of Twenty (G20) and the OECD is actively promoting global information