Core Viewpoint - Recent tax audits targeting taxpayers' overseas income have been initiated across various regions in China, with tax authorities implementing systematic checks and reminders to ensure compliance with personal income tax obligations [2][8]. Group 1: Tax Compliance Measures - Tax authorities in regions such as Shanghai, Zhejiang, Shandong, and Hubei have issued warnings and notifications regarding the collection of personal income tax on overseas income, with amounts owed ranging from hundreds of thousands to millions [2]. - A five-step approach has been established for tax audits, which includes risk reminders, corrective actions, interviews, formal investigations, and public exposure [2][8]. - As the deadline for annual personal income tax declarations approaches (June 30), many taxpayers have received notifications to review their income and tax declarations, emphasizing the need for compliance [2][8]. Group 2: Misunderstandings of Tax Residency - Many taxpayers incorrectly equate overseas residency status (such as permanent residency cards) with changes in their tax residency status in China, leading to potential tax compliance risks [3][6]. - According to Chinese tax law, individuals habitually residing in China may still be considered tax residents regardless of their overseas status, thus retaining their obligation to pay taxes on global income [3][6]. Group 3: Misjudgment of Income Tax Treatment - Some individuals mistakenly believe that capital gains from overseas stock trading are exempt from Chinese personal income tax, which is not universally applicable and depends on specific conditions [4]. - The tax obligation for income is determined by the source of income and the individual's tax residency status, meaning that overseas income may still be subject to Chinese tax if the individual is a tax resident [4]. Group 4: Risks of Tax Avoidance Arrangements - Taxpayers may face risks if their arrangements to defer or minimize tax payments lack commercial rationale, potentially triggering tax adjustments by authorities [5]. - The current tax law allows tax authorities to adjust tax liabilities based on the nature of income and the residency status of individuals, which could lead to additional tax liabilities if deemed non-compliant [5]. Group 5: Recommendations for Tax Compliance - Individuals are advised to assess their tax residency status based on their living arrangements and family circumstances, as these factors can influence their tax obligations [10]. - A comprehensive review of all income types, amounts, and tax payments is recommended to ensure compliance with both local and international tax regulations [10]. - Tax residents in China with overseas income must file their annual tax returns by June 30, including any overseas income declarations [10].