China set up special teams to track and tax the richest: Bloomberg

China has set up a series of special squads to track and tax the wealthy, with some units focusing on a single billionaire - part of the country's recent efforts to boost tax revenue from the rich, Bloomberg reported on Monday, citing people familiar with the matter.

The teams contain government officials, inspection experts and regulators, aiming to counter the lawyers, tax advisers and consultants hired by China's super-rich to lower their tax bills, according to the report.

This came as Beijing announced a new rule in July that the authorities will impose individual income tax on assets placed in offshore trusts and the income they generate.  As the October deadline looms, China's wealthiest are rushing to pay bills on their overseas trusts.

Some are scrambling to obtain foreign passports over fears that the country will impose an exit tax on individuals relocating abroad, while others are selling stocks or borrowing overseas to repay their liabilities.

Recently, Chinese hotpot chain Haidilao's (6862) co-founder Shu Ping pocketed HK$2.75 billion via 259 million shares sale, as her family was hit with an unexpected tax bill.

A few wealthy Chinese also tried to negotiate with tax officials, while some are considering legal action to protect their rights if their tax burden seems unfair or unaffordable.

In one case, the controlling shareholder of a Guangzhou company was ordered to pay back 100 million yuan (HK$116.86 million) in taxes. But after the firm threatened to relocate to Shanghai, local officials ultimately decided to reduce the bill to 5 million yuan.

Besides, one affluent family asked a consultant to find a small bank that Beijing's officials are unfamiliar with to safeguard their money, deeming prominent institutions such as JPMorgan Chase and UBS too famous.

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