On December 24th 2018, the State Council issued a statement notifying the following issues: The cancellation of the business account opening permit, and the increase supervision of individual accounts, especially concerning “public-to-private” transfers and over-limit balance accounts, aiming to prevent personal accounts from tax avoidance.
According to the statement, before the end of 2019, the account-opening license will be completely abolished and the bank account opening procedure of domestic enterprises will be changed from approval to just filing in order to facilitate business operations.
At the same time, bank account information will also be shared with the tax bureau. As long as the bank finds a suspicious account, it must report it to the tax and the central bank, otherwise it will be legally responsible.
In line with such provisions, Private-to-private (person to person) and private-to-public (person to company) transactions and transfer checks shall be strictly inspected. From January 1st, 2019, large-value transactions and the flow of personal accounts will be supervised by the central bank, including records of Alipay and WeChat. In particular, short-term consumption over 50,000 yuan and bank transfers over 200,000 or the equivalent foreign exchange will be monitored. And the following conditions will be supervised by the central bank.
- Up to 2 million RMB or more in public transfers ( person to company)
- Private transactions reached more than 200,000 per day
- Cash transactions of more than 50,000 yuan or equivalent in foreign currency.
In addition, funds flowing frequently, large amounts, and mismatched in the scale and scope of their own operations, as well as the sudden large-scale transactions of long-term idle accounts will also be strictly regulated.
Of course, if the company is in acting in the normal course of business, it may happen that large transactions may be reviewed, incurring in more formalities. As long as the transaction accounts are listed clearly and have a legal background, there is no problem.