Market News

(Bloomberg) -- Chinese authorities stepped up efforts to collect taxes from citizens with overseas investment income as part of a broader push to suppress cross-border trading that evades capital controls.

Six local tax bureaus including those in cities like Beijing and Shenzhen on Tuesday issued almost identical statements saying they “reminded and coached” some citizens to declare their overseas income and pay any overdue taxes. The authorities used big data analysis to track down the people, they said.

The latest development signals Chinese authorities aren’t letting up on hunting taxes stemming from offshore trading and preventing the evasion of capital controls. The move comes as authorities are seeking more sources of revenue to narrow a record budget deficit as income from land sales has dried up and Beijing has tightened the leverage of local governments.

The authorities partially singled out some tax scofflaws. A citizen with the surname Fu in southeastern Xiamen city had to pay almost 7 million yuan ($983,500) in overdue taxes and a fine. Another citizen surnamed Li in Sichuan province paid nearly 6.7 million yuan.

The tax push follows a similar concerted effort by local officials in late March, according to government records.

China’s tax push followed the 2018 implementation of the Common Reporting Standard, a global information-sharing system aimed at preventing tax evasion. While regulations have always stipulated that citizens be taxed on income worldwide, including investment gains, it had rarely been enforced until last year.

Under the CRS, China has been automatically exchanging information with nearly 150 jurisdictions about accounts belonging to people subject to taxes in each member country for the past few years.