BEIJING, Nov. 12 (Xinhua) -- China has received individual income tax declarations on offshore trust earnings totaling more than 160 billion yuan (about 23.8 billion U.S. dollars) following the end of a 90-day transition period, the country's tax authority said Wednesday.
More than 120 billion yuan in tax payments was collected in October alone, contributing to a nearly 90 percent year-on-year increase in China's individual income tax revenue that month, the State Taxation Administration (STA) said.
The transition period allowed taxpayers to declare and pay taxes without late-payment surcharges. The vast majority complied with the requirements, the STA said.
The Ministry of Finance and the STA on July 24 issued rules requiring Chinese tax residents who receive offshore trust earnings to declare and pay individual income tax within a 90-day transition period.
The rules clarify that gains from share sales and dividends generated through offshore trusts are subject to individual income tax, while setting out clear provisions and uniform calculation standards for taxing such income, said Li Xuhong, a professor at the Beijing National Accounting Institute. This improves policy certainty and transparency and encourages tax compliance, she added.
Li noted that taxing residents on income from both domestic and overseas sources, including offshore trust earnings, is a basic principle of China's individual income tax law and common international practice.
During the transition period, tax authorities provided guidance and reminders to help taxpayers complete their declarations, an STA official said.
Authorities will urge taxpayers who have made inaccurate declarations or failed to declare within the transition period to fulfill their obligations. Late-payment surcharges will apply in accordance with regulations, the official said.
Intermediaries and individuals found to have encouraged or assisted tax evasion will also be investigated and held accountable, the official added.
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