Taiwanese investors in China repatriated more earnings ahead of Beijing’s implementation of the Common Reporting Standard (CRS), Financial Supervisory Commission (FSC) data showed.
The combined earnings repatriated by listed companies on the Taiwan Stock Exchange (TWSE) and the Taipei Exchange (TPEX) totaled NT$422.6 billion, or 17.73 percent of their accumulated investments in China, valued at NT$2.38 trillion as of June 30, a record high.
Investors in electronics components and rubber-related products repatriated the most funds, the commission said.
The ratio was higher than last year’s 16.9 percent, when listed companies repatriated NT$3.9 trillion, compared with accumulated investment of NT$2.32 trillion, the data showed.
The Investment Commission lifted a ban on China-bound investments in 1991.
Taiwanese investors appeared keen to repatriate their earnings from China before Beijing implemented the CRS early this month, the FSC said.
The CRS, developed in 2014 by the Organisation for Economic Co-operation and Development, serves as an information standard for the automatic exchange of information regarding bank accounts on a global level between tax authorities. It aims to help authorities prevent tax evasion.
Chinese tax authorities plan to intensify their efforts to collect taxes from investors starting next year, when new personal income rules are to take effect.
While Taiwan is scheduled to implement the CRS next year, information exchanges with nations that have signed a tax agreement with Taipei would not start until 2020.
Although Taiwan and China in August 2015 signed a cross-strait tax agreement, the accord is pending approval by the Legislative Yuan, which has provided Taiwanese investors in China with breathing space in terms of taxes levied by Chinese authorities.
As of June, a total of 662 companies listed on the main board and 523 listed on the TPE have operations in China, making up 75.24 percent of the total number, FSC data showed.
The companies last quarter posted NT$119.8 billion in earnings in China, up NT$13.2 billion from a year earlier, the data showed.
Listed companies accounted for more than 97 percent of combined earnings.
Companies listed on the main board saw their second-quarter earnings in China rise NT$16.1 billion from a year earlier, due partly to soaring cement prices, while TPE firms suffered a decline of NT$2.9 billion in earnings due to higher operating costs, the commission said.
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