In addition to building up its legal arsenal, China is continuing to develop its tax laws. An official study estimates the number of Chinese citizens living abroad at 60 million. The government has decided to tax the worldwide income of these citizens and to clean up dual nationality.
At high price?
The Ministry of Finance has announced that all Chinese citizens will have to pay taxes on their global income worldwide. This measure, therefore, affects Chinese living abroad. For Chinese employees in Hong Kong, the bill could be a hefty one. The highest incomes are taxed at 17% in Hong Kong, while in China the rate rises to 45%.
End of dual nationality
An official study estimates the number of Chinese citizens living abroad at 60 million. China does not allow dual citizenship, which could force those with foreign citizenship to make a choice. All the more so as the Ministry of Public Security has started to clean up the Chinese residence certificates, the famous 户口 hùkǒu.
Figures on people holding at least two passports are unknown; they must be counted in hundreds of thousands at least. In recent years, tighter controls and the introduction of mandatory fingerprinting with the ID card and customs have enabled the authorities to identify Chinese holders of foreign passports. Still, only a small proportion of them was found. A fine is provided for, but is not always demanded. Abandonment of one of the nationalities, of course, is mandatory.
This year, the will to enforce the law is strong. The municipalities of Shanghai, Guangzhou and Chengdu have started to compose the first regulations. Local police stations ask Chinese citizens who have a foreign nationality or who are living abroad or their relatives in case of absence, to take the steps for the elimination of the resident’s certificate as of August 20. Students and employees sent abroad by a company or organization are not affected by this measure.
Will the elimination of the hukou lead to abolishing the Chinese identity card, which is indispensable for many administrative or private procedures? How will the person who has bought an apartment with his Chinese identity card be solved, will he have the same rights as a Chinese citizen living in China? Will a person who wants to give up foreign nationality recover his hukou and Chinese nationality?
23 juillet 2020