The main source of taxation in our country comes from enterprises. With the continuous increase of high net worth individuals and the gradual increase in the proportion of income tax, the tax administration for individuals is also constantly improving.
Based in China, the tax collection and management of natural persons are constantly being strengthened, and the tax structure for natural persons is also changing.
New Atmosphere of Personal Tax Collection and Management
In the 13th Five Year Plan Outline, Chapter 15 belongs to taxation, including accelerating the reform of the financial and tax system, improving tax collection and management methods, enhancing tax collection and management efficiency, and promoting electronic and intelligent management. In recent years, China has frequently introduced many new tax policies, some of which are targeted at enterprises, such as the "Notice on Fully Promoting the Pilot Program of Replacing Business Tax with Value added Tax" issued by the State Administration of Taxation in March 2016. However, there are also many new policies that are closely related to individual investors.
In December 2015, the General Office of the Communist Party of China Central Committee and the General Office of the State Council issued the "Plan for Deepening the Reform of the National and Local Tax Collection and Management System", which emphasized the establishment of a natural person tax management system, and constructed a natural person tax management system focusing on high-income earners from the aspects of legal framework, institutional design, collection and management methods, technical support, and resource allocation, continuously improving the level of natural person tax collection and management.
For high net worth individuals who have not declared in a timely manner, they can also rely on the Golden Tax Project and big data to obtain information. Through the establishment of a natural person management system, management data can be centralized to the State Administration of Taxation, and personal income and property information will be interconnected with the tax bureau. The tax bureau will conduct targeted inspections on high-risk taxpayers identified through evaluation, and increase efforts to investigate and punish tax related illegal and criminal activities.
The era of strong regulation of personal taxation is approaching, and there are also changes in the structure of personal taxation that have emerged. As proposed by this year's two sessions, we will promote the legislation of property tax and push the pilot program of levying property tax on individual housing in some provinces and cities since 2011 to the whole country. The legislative work arrangement of the Ministry of Finance in March also includes the revision of the Personal Income Tax Law, which will usher in a new era for personal taxation.