Customers wait in line to purchase Xiaomi Corp. Mi 8 smartphones inside a Xiaomi store in Hong Kong, China. (Photographer: Anthony Kwan/Bloomberg)

China Starts Sharing Income Data to End Global Tax Loopholes

(Bloomberg) -- In a move aimed at cutting tax evasion, China will start exchanging information on residents’ financial investments with about 100 other countries from this month, according to a statement on the tax agency’s website.

The information exchange will give tax officials a better view of Chinese residents’ overseas financial investments and earnings. The change is part of the Common Reporting Standard, a global agreement on sharing tax data backed by the Organisation for Economic Cooperation and Development.

Policy makers in Beijing are working to reform the income tax system, which puts more of a burden on wage earners than those with investment income that is harder to track. China also recently revised its personal income tax code, making foreigners who reside in the country for at least 183 days a year liable for tax on both onshore and offshore income.

In a move aimed at raising disposable incomes and supporting the economy, the government recently raised the tax-free income threshold and increased deductibles.

To contact Bloomberg News staff for this story: Yinan Zhao in Beijing at yzhao300@bloomberg.net

©2018 Bloomberg L.P.

With assistance from Editorial Board