China requires individuals to declare and pay income tax on foreign stock transactions at a tax rate of 20%.

Individuals with income from foreign stocks must declare taxes in the following year, are allowed to offset profits and losses within one year but cannot carry them over to the next year. The tax authority is enhancing the supervision of foreign income through CRS.

MAIN CONTENT

  • Income from foreign stock transactions is subject to personal income tax at a rate of 20% and must be declared annually.

  • Allows offsetting of profits and losses within the calendar year but not across years.

  • Strict penalties if real income is not declared, while enhancing supervision through CRS.

How does China regulate personal income tax from foreign securities?

Income from trading foreign securities is subject to personal income tax at a rate of 20% and must be declared in the following year.

The Chinese Ministry of Finance, according to a Financial Times report on August 4, has required individuals to pay income tax arising from foreign stocks at a rate of 20%. This is to ensure transparency regarding income sources and compliance with tax regulations. Individuals must declare this income in the year following its occurrence and pay taxes in accordance with the regulations.

How are individuals regulated regarding the offsetting of profits and losses from foreign securities?

Taxpayers are allowed to offset profits and losses within the same calendar year, not across years.

This offsetting helps minimize financial risk and create fairness in taxation. However, losses cannot be carried forward to subsequent years for offsetting, in order to limit tax evasion and ensure transparency in tax calculations each year.

What are the penalties for failing to declare income from foreign securities?

Failure to correctly declare will result in a demand for back taxes along with late fees, as well as strict penalties.

According to warnings from the Chinese tax authority, if individuals fail to declare or inaccurately declare foreign income, they will be subject to back taxes and additional late fees. Serious violations may lead to administrative penalties or stronger measures to enhance deterrence.

Enhancing supervision of foreign income through CRS is an important step to combat tax evasion and ensure financial fairness.

Quoted from the Financial Times report, 2024

How is the process and tools for monitoring foreign income applied?

The tax authority uses the automatic exchange of financial information standard CRS to monitor foreign income.

CRS (Common Reporting Standard) is an international tool that helps tax authorities quickly access financial data of individuals in other countries. As a result, monitoring and detecting foreign income has become more effective, helping to minimize the risk of tax evasion and increase transparency.

Frequently Asked Questions

Is foreign stock income subject to tax in China?

Yes, this income is subject to personal income tax at a rate of 20% and must be reported in the following year.

Can individuals offset profits and losses between years?

No, only offsetting within the same calendar year is allowed, not across years according to current regulations.

What are the penalties for not declaring foreign income?

Includes back taxes, late fees, and administrative penalties depending on the severity of the violation.

What is CRS and its role in monitoring foreign income tax?

CRS is a standard for automatic exchange of financial information that helps tax authorities monitor income from other countries more effectively.

What is the next step when being subject to back taxes?

Individuals must complete their back tax obligations and bear the incurred fees according to the regulations of the tax authority.

Source: https://tintucbitcoin.com/khai-bao-nop-thue-thu-nhap-co-phieu-nuoc-ngoai/

Thank you for reading this article!

Please Like, Comment, and Follow TinTucBitcoin to stay updated with the latest news in the cryptocurrency market and not miss any important information!