In the afternoon, I listened to a sharing about the taxation of Hong Kong and the US stock market. I almost fell asleep while listening. I used AI to organize some key points. Those who received a call from the tax bureau can refer to them. The first batch is mainly targeted at users with accounts of 1 million US dollars and huge trading volumes after 2022. ➤ CRS mechanism and global tax information exchange CRS core mechanism CRS (Common Reporting Standard) requires financial institutions to collect non resident account information and automatically exchange it with the account holder's country of residence through local tax authorities. Financial institutions need to determine their tax residency status based on the self declaration form (CRS form) and account information (such as address, phone number, transaction records) filled out by customers, and submit it to tax authorities in multiple countries. Scope of Information Exchange -Covering deposit accounts, custodial accounts, investment entities, and insurance accounts. -Under the trust structure, information of the settlor, trustee, protector, and beneficiary must be exchanged. -The exchange fields include account balance, interest income, dividend income, redemption amount, etc., but the lack of purchase cost information may increase the difficulty of tax calculation. ➤ Chinese Tax Resident Recognition Standards Legal Definition According to the Personal Income Tax Law, one who meets one of the following conditions is considered a Chinese tax resident: 1. Have a domicile (habitual residence) within the territory of China. 2. No residence but residing for at least 183 days within a tax year. ​​ Practical disputes -Holders of Chinese passports are usually assumed to be Chinese tax residents, even if they have permanent residency in another country or overseas assets. -The identification of residence does not depend on the real estate or registered residence, but on the fact of "habitual residence" (such as work, family, etc.). ➤ Key Points for Overseas Income Declaration Scope of application -Income types: salary and wages, investment income (stocks, funds, interest), operating income, property transfer income (including virtual currency transactions). -Tax rate: Comprehensive income (3% -45%), income from property transfer (20%), and deductible overseas taxes already paid (tax payment certificate required). ​​ Declaration process 1. Information organization: Sort out all overseas accounts (banks, securities firms, insurance), transaction details, and related income of overseas companies. 2. Tax calculation: Distinguish the source country of income, merge domestic income and calculate according to Chinese tax law. High frequency trading requires calculating profits on a transaction by transaction or consolidated basis. 3. Declaration method: Submit the "Personal Income Tax Annual Self Tax Declaration Form" through the "Personal Income Tax" APP or offline. ​​ Risk Warning -Failure to declare or false declaration may result in additional taxes, late fees (0.05% per day), and penalties for tax evasion (indefinite accountability). -Local tax authorities have strengthened inspections, and small accounts may also trigger inspections. ➤ Common Misconceptions and Risk Warning Misconception 1: Identity planning can avoid CRS Holding only a passport or tax number from another country cannot change one's Chinese tax residency status. Financial institutions make comprehensive judgments based on multidimensional information such as place of residence and contact information. Plans such as "Southeast Asian small country passport" and "offshore companies" are easily penetrated, and there are differences between the front-end commitments and back-end operations of some institutions. ​​ Misconception 2: Offshore structure tax exemption Trusts, BVI companies and other structures need to declare multiple levels of information, and offshore enterprises may be recognized as Chinese resident enterprises, facing 25% corporate income tax and 20% dividend personal income tax. Although the United States has not joined CRS, it exchanges information with China through FATCA and bilateral agreements. ​​ Misconception 3: Zero declaration or no notification is safe Automated CRS information exchange requires financial institutions to report in accordance with the law. If you have not received notification, you still need to proactively declare, otherwise it may be considered as intentional tax evasion. ➤ Compliance Suggestions and Summary 1. Proactively declare: Regardless of the size of the account amount, organize and declare all overseas income in accordance with regulations. 2. Professional support: For complex transactions (such as cross-border trusts and high-frequency investments), it is recommended to consult tax experts to avoid calculation errors or omissions. 3. Beware of the "scheme" trap: Do not easily believe in the "tax-free structure" and "do not exchange secrets". Compliance declaration is the only safe path. 4. Pay attention to the latest developments: The implementation of CRS in various countries is becoming stricter, and the OECD is continuously repairing loopholes. Long term planning needs to consider regulatory changes. ​​ ➤ Finally CRS and domestic big data inspections form a dual regulatory network, and tax compliance has become a global trend. Received a phone call from the tax bureau to proactively communicate and contact, and if there is an actual loss, please keep the securities firm's statement data safe