China is escalating efforts to collect taxes on investors’ global gains as the country faces fiscal pressure from slowing growth and a beleaguered property sector.
Beijing has long lacked the enforcement procedures to crack down on investors who spend at least half the year in China but evade a 20% tax on overseas income.
But the government now needs new sources of revenue as it tries to tackle local government debt and roll out stimulus programs.
The crackdown, though, is forcing some financiers to rethink their asset and tax strategies, largely over fears that Chinese brokerages will share their information with authorities, the Financial Times reported.
Some are switching to American platforms, further denting investor confidence in China.
AD