Financial and legal professionals are already very familiar with CRS, but for  the general public, many people still do not understand the basic concepts  and common sense of CRS. Below, the editor will briefly introduce a few common  sense of CRS policies.

What is CRS policy

In July 2014, the OECD released the "Automatic Exchange of Financial  Account Tax Information Standards" aimed at combating tax evasion and  maintaining a trustworthy tax system. Currently, over a hundred countries have  pledged to actively implement CRS, with more than 50 countries committing to  the first information exchange in 2017. China (including Hong Kong and Macau)  has committed to becoming the second batch of countries to implement CRS, implementing  new account opening procedures on January 1, 2017, and conducting the first  information exchange in 2018.

What are the impacts of CSR policies on Chinese companies registering overseas

① Chinese controlled companies that reduce their holdings overseas are required  to pay income tax;

② Chinese companies that open shell companies overseas must pay corporate  income tax to make money;

③ The equity and income of non listed companies overseas will be disclosed,  facing tax risks;

④ Overseas company bosses' assets hidden overseas will also face disclosure.

Taxation Issues of Overseas Insurance

Firstly, it is clear that overseas insurance will not be subject to taxation.  The Chinese National Taxation Bureau has clarified that CRS is not an additional  tax, but rather a collection of overseas taxes that should have been collected  from Chinese residents.

If you purchase a large policy in Hong Kong, although your policy information  will be disclosed. But according to Chinese tax law, insurance claims are within  the scope of exemption from personal income tax. For insurance dividends, the  tax law does not have clear regulations, but in essence, there is no personal  income tax levied on insurance.

Although there is no taxation, there are still two potential risks, one is  whether large value policies will involve evading foreign exchange controls.  Currently, individuals in China only have an annual foreign exchange quota  of 50000 US dollars. Secondly, customers with illegal income should worry about  being disclosed.

What information about CSR policies will be exchanged

The covered asset information includes deposit accounts, custodial accounts,  funds or insurance contracts with cash, and annuity contracts, all of which  must be exchanged.

Covered personal information: Your account, account balance, name, date of  birth, age, gender, and place of residence must all be exchanged.

CRS will involve various aspects, including taxation, law, corruption, asset  allocation, overseas insurance, family trusts, private equity funds P2P、 Wealth  management professionals, immigrants, etc.

Regional coverage of CRS

More than 100 countries and regions, including China, have joined the CRS  program, including some of the most popular investment countries for Chinese  investors, such as Canada, the Cayman Islands, Hong Kong, Singapore, and Switzerland.

CRS does not exchange personal asset information

CRS exchanges financial assets, while non-financial assets do not fall within  the scope of information that CRS needs to exchange, such as real estate, jewelry,  calligraphy and painting, precious metals, art, etc. However, it should be  noted that non-financial assets may also become financial assets due to improper  investment methods, and all overseas asset allocation requires consultation  with professionals.