Today I corresponded with Keith Bradsher of the New York Times article, “China Wants Taxes Paid by Citizens Living Afar” and asked if I could post his reply. He granted this request and I will post the 2 emails exchange I had earlier today. I appreciate his is quick reply and his willingness to engage on clarifying the position of the article. I leave it up to you to actively take part in this ongoing discussion and be heard! Please come to your own conclusions on the below informal exchange. URL:China Wants Taxes Paid by Citizens Living Afar Comments: Hi Keith, Your article today that has shed some light on the taxation system in China gave an impression that China will go after all it citizens without discretion like the US does with US Citizens abroad. However, this is not exactly the case as China has Resident/Territorial Base Taxation and not Citizen Based Taxation. This means China will not tax its Citizens worldwide income if they permanently live in another country (for example the US). Only the US does this in the world (except for a small African country) and, of course, it would create major problems if all countries did this (also, countries would vacuum money out of the US that should have been used on houses, investments and goods in the US as the money was earned while living in the US) . We should definitely catch the tax evaders, however there are a lot of average US citizens living abroad who are falling victim to tax filing and reporting requirements made to catch drug cartels. They are just simply not aware of international taxation and reporting issues (most do not even owe any US taxes due to credits from the US). Please consider editing this article so it distinguishes between RBT and CBT. See Wikipedia for example International taxation as it would mean a lot to the US Citizens Abroad Community. ---------------------------------------------------------------------------------------------------- Keith’s reply, Thank you for your note. But China has very strict rules that make it very hard for its citizens abroad to gain non-resident status. They need to be able to show that they have moved permanently overseas, acquired permanent residency abroad, have their main income or business abroad, have no plans ever to return to China and have their family abroad. China had paid little attention to overseas income before but is now paying more attention. That said, I understand and empathize with your point on the tax burden and particularly the administrative burden on overseas Americans (I am one). The bookkeeping is indeed extensive. Best, Keith
Posted on: Thu, 08 Jan 2015 15:34:49 +0000
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