OVERSEAS BANK ACCOUNT AND OFFSHORE TAX NUMBER, HOW TO AVOID CRS AND FINANCIAL ACCOUNT INFORMATION EXCHANGE BY HOLDING A SECOND PASSPORT TO OPEN AN ACCOUNT ABROAD
This year, after the outbreak of Wuhan pneumonia (New Crown Pneumonia, international scientific name Coronavirus), more and more people are concerned about the news of offshore asset allocation, how to transfer domestic assets to overseas bank accounts after liquidation, more people associate with the CRS and the automatic exchange of financial account information, how to do it in the end to be safe? Banks are using ID cards and passports to determine? What about residential address? What is Tax Indentification Number (TIN)?
Preface
In my previous article: Protecting Overseas Assets with Second Country Passports, for the first time the principle of Dominica pas sports and legal tax avoidance was made public, and many people wanted to do it themselves, but most people still think that buying a passport from Dominica, St. Kitts, or Vanuatu (or the citizenship by investment projects that are still open, such as Montenegro, Moldova, Cyprus, Antigua, Grenada, Turkey, St. Lucia, Malta, etc.) is not a problem. I later wrote a more advanced article: Transferring Assets Overseas, Are You Doing It Right? How to plan? I found that people do not understand what the tax code is? What exactly is the problem with going directly to the bank with your passport?
Services after naturalization in Dominica
Dominica's offshore citizenship allows for visa-free travel to nearly 150 countries, as well as the ability to apply for an international driver's license. Full citizenship also allows for the application of a Dominica Tax Identification Number, a driver's license valid for one or three years, a Dominica International Driver's License, a criminal (good conduct) record, and a notary public certificate of innocence, please refer to this link.
What are the problems of opening an account with only a second passport?
- Only a passport does not prove that you are a tax resident of the country
- You have not provided a legal address in the country
- You did not provide a tax ID for the country
- The bank will investigate the source of your funds
- Even if the account is successfully opened (probably because you provided your address and ID card in China), this means that the bank account information will be automatically exchanged back to China.
OECD ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT
The OECD (Organization for Economic Cooperation and Development) has published two guides to financial institutions worldwide on (1) how to determine a Chinese person's tax liability and (2) how to find out a Chinese person's tax identification number.
Tax Identification Number, TIN
Obligations of tax residents
Pay taxes, pay taxes, pay taxes. Once you fall into the status of a Chinese tax resident, you will become a target of China's global taxation, meaning that your bank account will be useless even if you open it with another nationality. For those who want to transfer their assets overseas, you will expose yourself to three risks.
- You are telling the government that you are a dual citizen.
- Can you submit records of funds leaving the country legally
- Are you confident that you can prove that the funds are tax-paid and legally obtained
China Tax Residents
Individuals who have residence in China, or who do not have residence and reside in China for 183 days or more in a tax year are tax resident individuals. The income obtained within and outside of China is subject to individual income tax in accordance with the regulations.
For Chinese tax residents who have financial accounts in OECD member countries, the account information will be automatically exchanged back to the Chinese tax office.The Chinese tax ID number is the number on the ID card.
Hong Kong tax residents
Individuals who are habitually resident in Hong Kong, or who have resided in Hong Kong for 180 days in a tax year, or 300 days in two consecutive tax years, are tax resident individuals. Hong Kong residents are required to pay tax on income derived from within the territory.
For Hong Kong tax residents who have financial accounts in OECD member countries, the account information will be automatically exchanged back to the Hong Kong Inland Revenue Department.The tax ID number of a Hong Kong resident is the number on the Hong Kong ID card.
Taiwan Tax Residents
A national who holds a Taiwan household registration and lands at least once a year or resides for 183 days in a tax year is a tax resident individual and pays personal income tax on income earned in and outside Taiwan in accordance with the regulations.
TAIWAN IS NOT A MEMBER OF CRS AND CURRENTLY ONLY HAS AN AUTOMATIC FINANCIAL ACCOUNT EXCHANGE AGREEMENT WITH JAPAN.
Japanese tax residents
Individuals who have a residence in Japan or who have lived in Japan for at least one year are tax residents and are subject to personal income tax on income earned in Japan and abroad.
For Japanese tax residents who have financial accounts in OECD member countries, the account information is automatically exchanged back to the Japan Tax Agency.The tax ID number for Japanese is the 12-digit number.
Dual Nationality
Duty to pay tax
COUNTRIES WITH GLOBAL TAXATION LEVY TAXES ON THEIR CITIZENS AS WELL AS TAX RESIDENTS ON INCOME EARNED ANYWHERE IN THE WORLD. IN THE CASE OF HAVING TAX CODES FOR BOTH NATIONALITIES, EVEN IF YOU ARE A DUAL CITIZEN LIVING ABROAD, YOU MAY OWE TAXES TO BOTH COUNTRIES, BUT IF THERE ARE INCOME TAX TREATIES BETWEEN THE TWO COUNTRIES/TERRITORIES, THESE TREATIES REDUCE OR ELIMINATE THE TAX LIABILITY OF ONE OF THEM. FOR EXAMPLE, TREATIES BETWEEN THE UNITED STATES AND NEW ZEALAND TAKE PRECEDENCE OVER THE INCOME TAX LAWS OF EACH COUNTRY TO AVOID DOUBLE TAXATION. EVEN THEN, AGREEMENTS UNDER CRS MAY MAKE YOUR BANK ACCOUNTS TRANSPARENT IN BOTH COUNTRIES, DUAL CITIZENS MAY BE REQUIRED TO FILE TAX RETURNS, AND BECAUSE TAX LAWS ARE COMPLEX AND CHANGE FROM YEAR TO YEAR, ACCIDENTALLY FALLING INTO TAX EVASION MAY BRING A SIGNIFICANT AMOUNT OF PENALTIES.
Strict implementation of tax residency is underway worldwide
Paying taxes is an obligation that citizens should do their duty, China officially became a global taxing country on January 1, 2019, in the CRS public documents, Chinese citizens' tax numbers and other Western countries is to complete a different system, financial institutions can directly register ID numbers as tax numbers to complete the automatic account information exchange matching, 2020 in the year the world is filled with epidemics (Coronavirus It is not difficult to predict that the government will need greater revenue to stabilize the country's development, and after the epidemic stabilizes, strengthening the investigation of offshore bank accounts may be the next important task.
It's expensive to get an identity, and even more expensive to be without a tax ID number
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Dominica Citizenship Program
- Established in 1993, the Dominica Citizenship Program is one of the oldest naturalization programs in the world.
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- Immigration can be processed quickly: time its about 2-3 months
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