Authority to crack down on tax evasion of cross-border properties transfer

(ECNS) - Gains from the indirect transfer of real estate and other properties will be subject to China's Corporate Income Tax (CIT), according to a revised circular released by the State Administration of Taxation (SAT).

In 2009, the Chinese tax authority specified only the indirect transfer of equity investments as a CIT item.

The move comes as the SAT strengthens control of cross-border transactions, part of efforts to crack down on tax evasion.

Analysts say the new policy will deal a heavy blow to international corporations that avoid paying taxes in China, the Economic Information Daily reported on Monday.

In the future, partnerships, trusts and other economic interests might also be affected, according to a policy study released by Ernst & Young, a multinational professional services firm.

Statistics released by authorities show that losses retrieved from anti-tax avoidance campaigns increased from 460 million yuan ($73 million) to 34.6 billion yuan between 2005 and 2012.