Beijing tweaks tax rules in sign it plans to align with global standards

China’s tweaking of tax reporting rules on financial accounts are fresh signs of Beijing’s stepped-up efforts to align with a multilateral scheme to combat tax evasion, industry experts say.

Beijing will require financial institutions to report detailed financial account information related to tax assessments of non-residents effective July 1 as it joins a global drive to adopt the Common Reporting Standard formulated by the Organisation for Economic Co-operation and Development to stem tax evasion through the use of offshore accounts.

Market watchers said the changes reflect efforts to align with global standards when compared with the draft version issued in October.

For instance, Beijing set up a designated website on the new compliance framework and updated wording in the rules to better align with global norms and with countries that have already adopted the framework, said Henry Wong, a KPMG tax partner in Shanghai.

“We have seen apparent efforts to better reflect global practices as Beijing is trying to go international in stipulating the tax reporting in line with the Common Reporting Standard,” Wong said.

The designated website offers an introduction to the rules as they apply in China, some guidance for industry players and frequently asked questions.