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Tax guidelines and regulations for large money transfers into China

Learn how to deal with tricky taxes when sending money to loved ones or to businesses in China.

Buying an apartment in Guangzhou, starting a business in Beijing or studying in Shanghai can require sending large money transfers to China. Before you move your money out of the Philippines, learn more about whether China taxes large cash remittances.

How China regulates large remittances

China doesn’t levy an inheritance or gift tax on cash sent into the country, which means your recipient won’t have to worry about filling out any extra forms come tax time if you’re sending a gift. If you’re transferring money for a purchase, they’ll report it just like they would any other business income.

But Chinese banks and money transfer companies do have to report any overseas or domestic transfers over 50,000 RMB/CNY, or about US$7,000. Transfers over US$10,000 from individuals also need to be reported under the new guidelines.

Do I have to report large transfers out of the Philippines?

You personally won’t have to report any amount of money you transfer out of the Philippines. The bank or money transfer company you use will do this for you. They are required to report any suspicious transfers or transfers over ₱500,000 to the Anti Money Laundering Council.

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MUST READ: How much money can I send to China?

There’s no legal limit on the amount of Chinese currency you can send to China. But Chinese citizens do have a limit on how much foreign currency they can convert or purchase per year — US$50,000 as of August 2019. If you’re sending PHP to China, the money can be counted towards that limit. The US$50,000 a year limit also applies to money being sent out of China.

Chinese nationals and residents also face restrictions on withdrawing foreign currencies abroad, which can make it difficult to send money back to China while working overseas.

Specific banks in China may impose additional restrictions on transfers. Because of this, as well as other complex laws regarding foreign investments in China, it’s recommended that you check with not only the transfer provider but also with your recipient’s bank before initiating a transfer.

How can my recipient in China get the money?

Depending on which provider you choose, your recipient can pick up the money in cash or have it deposited directly into their bank account or mobile wallet. Your recipient may need to provide government-issued photo ID or a transaction confirmation number to receive your funds — this is particularly likely if you’re sending cash.

How to send money to China

Bottom line

China’s lack of a gift tax makes it an easy country to send money into. As with all international money transfers, be wary of potential fraud and only send money to people you know. Using a reputable provider can safeguard you from potential scams.

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