CHINA Law and Practice Contributed by: Chengchen Gan (Mark), Commerce & Finance Law Offices
dict that the path to real estate tax reform will involve gaining experience and designing effective strategies based on these programmes before advancing to a national legal framework to support orderly implemen - tation across the country. 1.5 Stability of Tax Laws On the legislative front, the development of tax laws in China has been relatively stable. Following the revi - sion of the Individual Income Tax Law in 2018, sub - sequent laws such as the Real Estate Tax Law, the Deed Tax Law, and the Stamp Tax Law have been suc - cessively enacted. As of the date of writing, with the introduction of the Value-Added Tax Law, laws have been enacted for 14 of the 18 current tax types. At the same time, the revision of the Tax Collection and Administration Law, as the highest-level procedural law in China’s tax legal system, is also being acceler - ated. The revised draft was released for comment on 28 March 2025 via the websites of the State Taxation Administration and the Ministry of Finance. However, on the enforcement side, there remains room for improvement in the practical stability of Chi - nese tax laws due to the lack of sufficient and timely implementation rules and regulations. In 2013, the “Notice of the State Council Office on Deepening the Division of Key Tasks in Reforming the Income Distribution System” mentioned plans to reform and improve property taxes and to con - sider introducing inheritance taxes at an appropriate time. However, despite increasing discussions over the years, the progress on property taxes in China remains relatively stable (see 1.4 Taxation of Real Estate Owned by Non-Residents ), and inheritance taxes have not yet been put on the agenda. For high net worth individuals, the focus remains on the Indi - vidual Income Tax as a key concern. 1.6 Transparency and Increased Global Reporting The Chinese government has been committed to enhancing the transparency and compliance of tax laws to address abuses or loopholes. As early as November 2016, the State Administra - tion of Taxation and the State Administration of For -
eign Exchange entered into the “MOU on Promoting Information Sharing and Implementing Joint Supervi - sion Cooperation”. The signing of this memorandum laid the groundwork for the application of tax-related financial account information obtained through CRS exchanges in combating illegal activities such as ille - gal transfer of foreign exchange funds and evasion of foreign exchange controls by the State Administration of Foreign Exchange. In September 2018, the State Administration of Taxa - tion conducted the first automatic exchange of tax- related financial account information across borders with other countries (regions) under CRS. Additionally, China reached a preliminary agreement with the United States in 2014 to implement the For - eign Account Tax Compliant Act (FATCA), requiring the exchange of financial account information between the two countries. This has led to increased transpar - ency of Chinese individuals’ overseas financial assets and a significant rise in tax burdens. Some individuals have chosen to relinquish their US citizenship to avoid high tax liabilities. 2. Succession 2.1 Cultural Considerations in Succession Planning Traditional Chinese culture places great importance on family and the continuity of the family lineage. Regardless of the size of the family, the older genera - tion tends to transfer wealth to the next generation. For instance, in China, immediate family members such as children and spouses usually enjoy more right of succession, while non-immediate family members like siblings have less rights and are listed as second - ary in the order of statutory inheritance. Moreover, Chinese traditional culture emphasises fil - ial piety and gratitude towards those who raised and supported individuals. Inheritance laws take this into account by allowing appropriate inheritance to individ - uals who relied on or supported the deceased, even if they are not direct heirs.
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