Chinese Tax Authorities Follow the Money Abroad

By Sam Willie

The New York Times reports on an attempt by Chinese tax authorities to more strictly enforce taxes on Chinese citizens who earn income abroad. Since 1993, Chinese citizens and companies have been required to pay domestic taxes on the entirety of their income, regardless of where it is earned. In reality, reporting of income earned abroad is infrequent and tax avoidance common. Going forward, it is predicted that China will pursue high profile enforcement actions against those engaging in international tax avoidance on income earned abroad as a means of sending a message to wealthy individuals and corporations alike.