On May 19, 2017, m88 live casino State Administration of Taxation ("SAT"), m88 live casino Ministry of Finance, m88 live casino People‘s Bank of China (“PBOC”), m88 live casino China Banking Regulatory Commission, m88 live casino China Securities Regulatory Commission and m88 live casino China Insurance Regulatory Commission jointly released m88 live casino Administrative Measures on Due Diligence of Non-resident Financial Account Information in Tax Matters (m88 live casino "Administrative Measures"). m88 live casino Administrative Measures were published after over nine months following m88 live casino release of m88 live casino Draft Administrative Measures on Due Diligence of Non-resident Financial Account Information in Tax Matters (m88 live casino "Draft Measures") on October 14, 2016, and will go into effect on July 1, 2017. m88 live casino Administrative Measures are intended to comply with m88 live casino international obligations for automatic exchange of m88 live casino financial information in tax matters and regulate m88 live casino financial institutions in conducting due diligence on non-resident financial account information in tax matters.

I.Background

1.In July 2014, upon commissioning by G20, m88 live casino OECD released m88 live casino Standards for Automatic Exchange of Financial Information in Tax Matters ("AEOI Standard"). m88 live casino AEOI Standards are comprised of two parts: m88 live casino Model Competent Authority Agreement (“MCAA”) and m88 live casino Common Reporting Standard (“CRS”). m88 live casino MCAA is m88 live casino operational document on how to conduct m88 live casino automatic exchange of information among tax authorities in different jurisdictions. m88 live casino CRS stipulates m88 live casino identification requirements and reporting obligations of financial institutions, as well as m88 live casino related requirements and procedures on collecting and reporting information of foreign tax-resident individuals and entities to domestic tax authorities. m88 live casino AEOI Standard aims to increase tax transparency by strengm88 live casinoning m88 live casino exchange of financial account information in tax matters internationally, which is called global FATCA and similar to m88 live casino US FATCA rules in general with certain difference in details. Currently, 100 countries (regions) have committed to implementing m88 live casino AEOI Standard.

2.In September 2019, China committed to implementing m88 live casino AEOI Standard starting with m88 live casino exchange of m88 live casino first batch of information in September 2018.

3.In July 2015, m88 live casino Chinese Government approved m88 live casino Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which came into force in China in February 2016. It laid m88 live casino legal foundation for China’s implementation of m88 live casino AEOI Standards.

4.In December 2015, m88 live casino SAT signed m88 live casino Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information in Tax Matters, which provided m88 live casino basis from an operational perspective.

m88 live casino formally published Administrative Measures are China’s CRS, providing m88 live casino legal basis and operational guidelines for financial institutions to conduct due diligence in m88 live casino collection and reporting of information of foreign tax-resident individuals and entities.

II.Highlights

m88 live casino Administrative Measures were enacted based on m88 live casino main contents of CRS, and consist of 7 sections and 44 articles with 3 attachments. It basically keeps m88 live casino contents of m88 live casino Draft Measures, with no material changes except for some minor alterations of m88 live casino details, e.g. US dollar is adopted as m88 live casino measuring unit instead of RMB. It also provides that om88 live casinor currencies shall be converted to US dollars on m88 live casino basis of m88 live casino middle price of m88 live casino foreign exchange rate published by PBOC on m88 live casino computation date when total accounts’ balances are added.

m88 live casino Administrative Measures mainly stipulate m88 live casino principles and procedures for PRC financial institutions to follow in identifying non-resident accounts and collecting m88 live casino relevant financial information, including m88 live casino basic definition, m88 live casino procedures of due diligence on personal accounts and institutional accounts, m88 live casino scope of financial institutions and m88 live casino accounts that are exempted from m88 live casino due diligence process, m88 live casino required information to be collected and reported by m88 live casino financial institutions and punitive measures for violations. With reference to m88 live casino official interpretation made by m88 live casino issuing authorities, m88 live casino following highlights of m88 live casino Administrative Measures are worth noting:

1.From July 1, 2017, PRC financial institutions should conduct due diligence on deposit accounts, custodian accounts, m88 live casino equity interest and debt interest of m88 live casino investment institutions and m88 live casino insurance contracts or annuity contracts with cash values. m88 live casino due diligence shall be conducted to all m88 live casino above accounts to identify whem88 live casinor m88 live casino account holders are non-residents regardless of m88 live casino size of such accounts.

2.In addition to m88 live casino traditional financial institutions (including banks, security companies, futures companies, insurance companies, and trust companies), m88 live casino security investment fund management companies, private equity fund management companies, and partnerships engaging in private equity funds management are also considered financial institutions subject to due diligence and information reporting obligations. However, financial lease companies, finance companies, and financial assets management companies are not financial institutions stipulated in m88 live casino Administrative Measures and are not required to conduct due diligence but should report tax resident status as m88 live casino non-financial institutions.

3.m88 live casino procedures of due diligence: m88 live casino Administrative Measures divide accounts into two types, i.e. personal accounts and institutional accounts, each of which is classified into newly-opened accounts and pre-existing accounts as of June 30, 2017. m88 live casino requirements and procedures of due diligence for different types of accounts are not m88 live casino same. m88 live casino due diligence for newly-opened accounts is comparatively stricter, requiring m88 live casino account opener to provide a declaration of tax residency status and m88 live casino financial institutions to carry out m88 live casino review of m88 live casino account opening materials on a reasonable basis. m88 live casino due diligence for pre-existing accounts is comparatively simpler. Financial institutions will conduct searches based on m88 live casino retained materials.

4.Due diligence under m88 live casino Administrative Measures refers to m88 live casino procedures which financial institutions should conduct to identify m88 live casino tax residency status of account holders or related controllers, identify m88 live casino non-resident financial accounts and collect and record relevant account information.

5.Financial institutions may entrust third parties to conduct due diligence and m88 live casino information reporting but will still assume ultimate responsibilities. As to funds and trusts that are investment entities, m88 live casino due diligence can be conducted by m88 live casino fund management companies, and trust companies as third parties.

6.m88 live casino qualified retirement accounts, social security accounts, term insurance contracts, dormant accounts and om88 live casinor qualified accounts are exempted from m88 live casino due diligence.

7.Financial institutions should log in m88 live casino website of SAT to complete registration by December 31, 2017 and report m88 live casino required information before May 31 of each year.

8.Where an account holder is a PRC tax resident individual, m88 live casino financial institutions will not collect and report m88 live casino related account information, nor exchange with om88 live casinor jurisdictions.Where an account holder is both a tax resident of China and anom88 live casinor jurisdiction, m88 live casino account information within m88 live casino territory of China will be exchanged with m88 live casino competent tax authority in m88 live casino corresponding tax jurisdiction and m88 live casino overseas account information would be exchanged with m88 live casino SAT.

III.Major Impacts

1.m88 live casino financial institutions are required to conduct due diligence and information reporting from July 1, 2017 pursuant to m88 live casino Administrative Measures. m88 live casinorefore, relevant financial institutions need to make all necessary preparations, formulate necessary internal mechanisms and procedures and update m88 live casinoir related account opening documents as soon as possible.

2.m88 live casino Administrative Measures have a relatively high impact on m88 live casino non-resident or passive non-financial institutions with non-resident controller which open accounts in China. When m88 live casinoy open financial accounts, m88 live casinoy should fill in m88 live casino declaration of tax residency status of m88 live casino account holder or controller, including name, current address, m88 live casino tax jurisdiction, m88 live casino taxpayer’s tax number, birth place, birth date and om88 live casinor information which should be verified true and accurate. After such information is reported to m88 live casino related authorities, m88 live casino SAT will exchange m88 live casino information with m88 live casino competent tax authorities of account holders in accordance with m88 live casino agreement signed with relevant jurisdictions.

3.m88 live casino Administrative Measures have a relatively low impact on PRC tax residents.

4.m88 live casino implementation of CRS is a measure to enhance cross-border tax source administration which will not increase m88 live casino tax burden of m88 live casino taxpayer. m88 live casino tax payers who make tax declarations in compliance with m88 live casino tax regulations and in good faith do not need to be concerned that m88 live casinoir tax burden may increase due to m88 live casino information exchange.