How to pay taxes on the money earned from trading Hong Kong and US stocks? Who will be targeted? How to avoid being punished? Multiple tax bureaus have launched simultaneous reviews, and it is expected that many people will receive declaration notices in the near future, with the amount of additional taxes ranging from tens of thousands to millions. This time it is not groundless - the CRS Global Tax Information Exchange Mechanism has been exchanging data for a long time, and the tax bureau has obtained the details of your overseas accounts (bank cards, securities firms, insurance, etc.) through financial institutions. It has been circulating for so long, and now it is officially closed. Starting from March 2025, tax bureaus in Fujian, Shanghai, Zhejiang, Shandong, Guangdong and other places have started synchronous verification of overseas income, with disclosed cases involving tax payments ranging from 100000 to millions. Verification process Reminder → Urge rectification → Interview warning → Filing inspection → Public exposure How to pay taxes on the money earned from trading Hong Kong and US stocks? 1. Dividend tax -US stock dividends: A 10% tax is withheld in the United States, and an additional 10% (totaling 20%) must be paid upon returning to China. A tax payment certificate is required to apply for deduction, but the process is complex. -Hong Kong stock dividends: Hong Kong has already deducted 10%, and according to the tax treaty between mainland China and Hong Kong, there is no need to make up for it. 2. Capital gains tax/property transfer tax -Tax rate: 20% (calculated based on single profit, non deductible losses) -Calculation method: Profit=Sell price - Buy price - Transaction cost. -Key difference: A-shares are temporarily exempt from capital gains tax, but Hong Kong and US stocks are required to pay it. Failure to declare for many years may result in additional late fees and fines. -Loss offset: Investment losses can be offset against other capital gains of the same year, and complete transaction records must be kept for future reference The big injustice a few days ago was taxed in this way, not only losing money but also having to pay taxes. However, tax collection also requires checking all records, which may not necessarily be calculated according to this. This obviously unreasonable algorithm was also brainstormed by some clever person. Who will be targeted? -Coverage: including over 100 countries and regions such as Hong Kong, Singapore, and Europe (excluding the United States, but exchanged separately through FATCA) -Report content: identity information, account balance, transaction records, dividends, capital gains, etc -Exemption conditions: Accounts opened in Hong Kong before 2019 with a balance of ≤ 250000 US dollars can be temporarily exempted, but additional reporting is still required after exceeding the limit -Special note: Financial institutions can independently decide whether to report small accounts, so even if the amount is low, it may still be subject to spot checks! How to avoid being punished? -Long term holding: paid according to dividends and bonuses -Overseas status: Avoid dual taxation residency status and use tax treaties to avoid double taxation -American securities firms: Interactive Brokers and First Securities, with different data exchange protocols -Late payment fee: If you receive information from the tax bureau and have not declared for many years, you may be subject to late payment fees and fines -Cancel account? It's probably useless. In order to comply with regulations, data is usually kept for several years and checked -The profits from encrypted assets are not required to be taxed and are already on the edge. Firstly, it is necessary to recognize that encrypted assets are legal assets, but in the future, compliance may also lead to a review of several years' profit data