In addition to the speculation of foreign exchange stocks and crude oil, the global rich also like to buy passports. New York Times has conducted an investigation, these rich people spend an average of 2 billion US dollars (about 12.6 billion RMB) each year to buy a second or third country passport and visa.
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Among them, the Caribbean countries’ passports are the most popular for the travel, investment and tax advantages. They do not have to pay personal income tax, no capital gains tax, no inheritance tax, etc., the greatest extent to avoid the loss of wealthy assets.
But! Buying passports and visas to hide assets won’t work anymore!
October 16, 2018 – The OECD publishes the results of more than 100 CBI/RBI programs provided in the jurisdictions that have committed CRS to determine which investment immigration projects may pose a high risk for CRS integrity.
Potentially high-risk CBI/RBI schemes are those that give access to a low personal tax rate on income from foreign financial assets and do not require an individual to spend a significant amount of time in the jurisdiction offering the scheme.
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Such schemes are currently operated by Antigua and Barbuda, The Bahamas, Bahrain, Barbados, Colombia, Cyprus, Dominica, Grenada, Malaysia, Malta, Mauritius, Monaco, Montserrat, Panama, Qatar, Saint Kitts and Nevis, Saint Lucia, Seychelles, Turks and Caicos Islands, United Arab Emirates and Vanuatu.
Official Notice from Ministry of Commerce of the P.R.C
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On October 17, 2018, countries such as Antigua and Barbuda, Bahamas and Dominica in the Caribbean were blacklisted by the OECD.
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On October 23, 2018, among the EU member states, Cyprus and Malta were blacklisted by the OECD.
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On October 31, 2018, Seychelles, Monaco, Bahrain, and Grenada, which are known as tax havens, were blacklisted by the OECD.
# Schemes that potentially pose a high-risk to the integrity of CRS
https://www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/residence-citizenship-by-investment/
SUGGESTION
We have always advised our clients to do long-term asset planning and tax planning, rather than rushing to buy passports or other means to hide assets. In the face of the increasingly transparent trend of global taxation, we would like to give some suggestion to those have assets (company, bank account, property) in the countries of the CRS list…
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1
Please reply and upload relevant information in time if you receive bank letter or bank manager inquiry, including annual auditing update, accountant certified copy, tax-resident declaration, details of a transaction, and etc. If you are unable to confirm the bank’s needs, please contact our professional consultant to guide you.
2
You need to do auditing and update the latest directors’ information on an annual basis if you own the offshore companies (such as Hong Kong companies, Singapore companies).
3
CRS is to check the financial accounts of non-national tax residents in each country. The accounts opened before the implementation of CRS will also be in the inventory list.
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If you still want to keep offshore companies and bank accounts, please make up for the previous annual audit as soon as possible, let our consultants provide you with the best solution;
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If you do not want to keep the company, please pay the tax in time and cancel the company.
4
It is essential to audit and report tax on time every year. Auditing≠paying taxes, we will help you to operate your company reasonably and legally.