China to Monitor Foreign Company Profits to Prevent Tax Evasion

China will set up a system to monitor foreign companies’ profits as it looks to eliminate cross-border tax evasion.

China will seek to have a “full grasp” of the profit levels of foreign companies to stop them from moving their profits out and eroding the tax base, according to a statement posted on the State Administration of Taxation website today, citing its deputy head Zhang Zhiyong. Authorities will also tighten management of tax practices by Chinese companies abroad, Zhang said.