Recently, rivers and lakes began to spread: some mysterious taxes are brewing.
For example, some western countries are popular, but China does not yet have a property tax, estate tax and so on. The latest Treasury data showed that revenue fell for the first time year-on-year this year for the first time since October, especially as tax revenues fell 5.1 percent from the same period a year earlier, adding to the dodgy news.
In fact, 2018 can be called the year of tax cuts. The winners are the wage-earning middle class and the small and medium-sized enterprises that earn business income. But high-net-worth individuals with assets have become the object of regulation. There is a sentence called what: damage outside the dike inside the embankment.
More recently, Time line has produced a tax that has rarely been heard of before-the tax on abandonment. Is it the next step for the state to step up taxes on this group?
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Let`s take a look at this PPT. first. The picture is a sharing event on the subject of the upcoming tax on abandonment. The author is a tax official of the Department of Administration of Taxation and Science and Technology of the State Administration of Taxation.
What kind of tax is abandonment tax? As the name suggests, this seems to be aimed at people who tend to emigrate abroad. Is government going to tighten up regulation of these people?
According to the summary in PPT, the author understands that the "tax on abandonment" mentioned in this speech may not be a typical tax in international tax. To put it simply, this "abandonment tax" in PPT is not a tax at all.
We know that one of the major events in the tax community this year is the introduction of the new personal income tax law, which absorbs more common international norms and concepts and, based on the new situation under the new situation, introduces a comprehensive tax system. Some new contents, such as anti-tax avoidance clauses, are given in this paper, and the judgment of Chinese resident taxpayers is further defined.
Two new personal income tax laws are mentioned in the new personal income tax law, namely, Article 10 and Article 13, in the case of individual residents` emigration and cancellation of household registration in China, as mentioned in the above-mentioned PPT. In both cases, taxpayers who cancel Chinese household registration due to emigration shall settle the tax before cancelling the household registration.
Article 34 of the detailed rules for the implementation of the personal income tax Law, which specifically refers to the operational details, should declare the following to the tax authorities:
1. The comprehensive income of the year of cancellation of the household registration and the payment of the operating income shall be settled,
2. Payment of taxes on other income in the year in which the household registration is cancelled,
3 and tax arrears in prior years
The author understands that this is a reciprocal response to Article 44 of the tax Administration Law. The tax collection law stipulates that taxpayers in arrears of taxes need to leave the country and should settle the taxes payable, late payment and fines to the tax authorities before leaving the country. In theory, tax payers are also allowed to provide guarantee.
In a word, you have to leave the country, you want to return, yes, but please first clear the previous outstanding tax. For most taxpayers who do not owe tax, this so-called "tax on abandonment" has no effect at all.
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So what is the true tax on international taxation like?
In fact, the United States is the only country in the West that actually uses the name "abandonment tax". Other countries, such as Canada, Australia, etc., have similar tax rules, but they cannot be called that name. This is mainly determined by the special tax system of the United States.
One of the most fundamental issues in the tax law is resident and non-resident taxpayers. Generally speaking, if you are recognized as a resident taxpayer, you need to tax your income from all over the world, and if you are only a non-resident taxpayer, you only need to tax income from that country.
For example, you work and do business in China, you have wages, salaries and operating income from China, and you also go to the United States to invest in real estate and collect monthly rent. If you are a resident taxpayer in China, then your salary and salary. Both operating income and US rent are taxed to the China Taxation Administration, and once you are considered a non-resident taxpayer in China, the rent you collect from the United States is not taxed by the China Taxation Service.
On this point, tax rules are generally consistent, except for tax depressions or tax havens, such as Hong Kong or Singapore. Those countries or regions say, even if you are my resident taxpayer, you only need to tax income from my local sources, and income from overseas sources does not have to be paid here, so you should be able to understand by now. Why are so many high net worth people in the world so fond of emigration to Hong Kong and Singapore?
When it comes to resident taxpayers, when it comes to judging whether taxpayers belong to residents, the judgment standards of all countries, including China, are in fact similar. First, look at the time you live in your country, and second, look at the density of ties between you and your country.
In relation to your country, it depends not only on which nationality you hold, but also on all aspects of your situation, such as family, work, property, social relations, and so on. Finally, determine which country you are closely connected with to determine which country you are a tax resident.
But the United States is quite special. The US tax law stipulates that as long as you are an American citizen or an American green card holder, no matter where you are in the world, no matter how long you have lived in the United States for a few days, and whether you have any other close ties with the United States or not, You are a tax-paying resident of the United States and are required to pay taxes on global income to the United States Inland Revenue Service.
What a great place to go into the sea.
It is because of this difference that the United States, which is determined by nationality, has waived the tax. Because under the U. S. tax code, you may become a non-resident taxpayer only if you give up American citizenship. Other countries are referred to as immigration taxes or withdrawal taxes because in those countries, nationality does not necessarily represent resident taxpayers.
Whether it`s a tax on abandonment or immigration, its tax policy is that when a person changes from a resident taxpayer to a non-resident taxpayer, all his property is deemed to be sold at a fair market value at the moment of his transition. The resulting capital gains or losses are subject to individual income tax.
All property includes real estate, stocks, bonds, personal belongings, such as cars and so on. Of course, some countries will introduce some exemptions, especially for large assets such as real estate, but securities such as stocks or other investments are generally not exempt.
For example: when Zhang left Australia to return to work in China and planned to stay in China for a long time, then on the day of his departure from Australia, all his assets in the world would be deemed to be sold at the market price of the day. For example, he held 10, 000 shares of BHP, in Australia for a cost of $10. On the day he left, the BHP closed at $70. Although he still held BHP shares that day, he did not sell them, but the Inland Revenue Department will acquiesce that he sold all 10 000 shares for $70. So his stock gain of $ six hundred thousand would require a personal income tax to Australia`s government.
Of course, when dealing with specific taxes, some countries still have some options for such taxpayers. Just like the example above, after all, Zhang Tudou did not sell shares, did not have cash in real gold and silver, and made him pay so much tax at once. He may not be able to pay, so he can choose to pay in batches or apply not to be sold for the time being.
What about China? We, in China, follow the standards of most of the countries in the world in determining this issue by resident taxpayers, that is, judging from a closely linked perspective, so there is no such thing as a so-called tax on abandonment.
And at present, we in China do not seem to have the so-called immigration tax or withdrawal tax, from resident taxpayers to non-resident taxpayers, according to China`s current tax laws, do not need to be treated as if they were sold.
Li Tudou, for example, left China and emigrated to Australia, although he holds 10,000 Hong Kong-listed Tencent shares at a cost of $100 and a market price of $350 on the day. As long as he does not sell it, the China tax Administration will not ask him for any tax.
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Will China, in the future, align itself with the West by introducing immigration taxes or withdrawing taxes? The author thinks that the possibility still exists.
First of all, from the tax principles, such as Li Tudou in the previous example, according to the Australian tax law, after Li Tudou entered, Australia regarded him as buying Tencent shares at the same market price for the day. That is to say, his stock cost becomes $350 instead of $100, so if he sells the shares for $500 in the future, his stock in Australia will yield $1.5 million ($500 to 350), and he will only have to pay a tax on the $1.5 million income. But his real income is actually $4 million ($500 a hundred).
Because Tencent shares are listed in Hong Kong, they do not belong to income from China, and he is a non-resident taxpayer in China, so the China Taxation Bureau has no right to collect them. In Hong Kong, the return on equity investment was tax-free, resulting in a $2.5 million differential income that no one was taxed on him, and that money became a tax of no ownership.
Second, as the PPT says, in order to curb wealthy immigrants, crack down on tax avoidance and prevent asset outflows, the government may put pressure on the outside world by imposing immigration taxes or withdrawing them.
So in the end, it`s an old saying: everything should be done before it`s too early.
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