china-tax

China Tax Reference and Planning for Overseas Brokerage Data

Prepare official-source evidence reviews, informational annual China individual income tax estimates, and year-end planning reviews for China tax residents using IBKR/Flex data first. Focus on overseas income management, foreign tax credit, treaty withholding sanity checks, RMB conversion assumptions, filing evidence, and tax-planning review items.

Safety Boundary

• Provide informational estimates, evidence organization, and planning checklists only; never state a final tax payable amount or filing position as definitive.
• Recommend confirmation with a qualified tax professional or competent tax authority before filing.
• Do not determine China tax residency conclusively; use only explicit user-provided residency assumptions and mark them for review.
• Recheck official sources and effective dates for the relevant tax year before relying on rules or forms.
• Treat default rates such as 20% for dividend estimates as configurable assumptions, not final law application.
• Do not invent missing 1042-S amounts, brokerage gross income, withholding tax, country allocation, income category, cost basis, realized gains, or RMB exchange rates.
• Keep U.S. treaty withholding checks separate from China IIT calculation.
• Mark ambiguous or unsupported tax treatment as review_required.
• Do not provide tax evasion, concealment, false reporting, or illegal avoidance advice.

Reference First

Consult references/official-tax-rules-and-implementation-plan.md before answering detailed calculation, treaty, overseas-income management, CRS, foreign-tax-credit, or implementation questions. It contains official-source links, rule summaries, formulas, output tables, a web-app pattern review, and a staged implementation plan.

Current Capability

Handle these tasks as research, design, evidence preparation, and manual estimate workflows:

1. Explain how Form 1042-S, brokerage data, China resident IIT, treaty withholding, and foreign tax credit fit together.
2. Build evidence tables from loaded IBKR Flex cash transactions.
3. Draft annual filing calculation workflows for dividends, withholding tax, opt-in STK realized-gain evidence, and later-phase 1042-S reconciliation.
4. Produce year-end planning reviews that identify evidence gaps, possible withholding-rate issues, tax-lot/cost-basis issues, currency assumptions, and timing considerations.
5. Produce implementation plans for deterministic code and tests.

The automated ibkr_china_tax_annual_calc MCP tool uses IBKR Flex as the primary source for Phase 1 U.S. dividend/withholding estimates and opt-in Phase 2 STK realized-gain evidence. 1042-S is optional follow-up reconciliation/evidence check, not required input. Activity-statement reconciliation beyond loaded Flex cash transactions/trades, options, derivatives, complex corporate actions, cost-basis hazards, and non-USD dividends or gains remain manual/review-required. Use scripts/china_tax_self_check.py for deterministic local-file self-check reports. Do not claim it produces final tax filing advice; it produces evidence tables, informational estimates, and review checklists.

Annual Filing Calculation Workflow

Use this workflow for annual reporting / 年度报税工具 requests. When slash commands are available, use /ibkr-trade-analyzer:china-tax-annual for annual filing evidence reviews.

1. Clarify tax year, residency assumption, brokerage source, and available documents.
2. Load IBKR data when available with ibkr_fetch_data; call ibkr_china_tax_annual_calc for dividend, withholding, RMB conversion, foreign-tax-credit estimates, and opt-in STK realized-gain evidence when requested.
3. Treat 1042-S as optional follow-up reconciliation/evidence check when official tax-form reconciliation is required.
4. Use same-tax-year IBKR USD/RMB FX trade evidence before producing automated RMB amounts when available; otherwise require explicit documented rates. Do not present either method as an official SAFE/PBOC/state-tax exchange-rate determination.
5. Compute only categories with explicit data and assumptions.
6. Return evidence summary, China IIT estimate, treaty sanity check, realized-gain review items when enabled, missing inputs, and filing support checklist.

Start with U.S.-source dividends and withholding tax. Use include_realized_pnl=True only for opt-in STK realized-gain evidence/estimate workflows. Defer options, complex derivatives, corporate-action hazards, and FX gain/loss unless the user explicitly asks for planning treatment.

Year-End Tax Planning Workflow

Use this workflow for 年前税务优化建议 / year-end planning requests. When slash commands are available, use /ibkr-trade-analyzer:china-tax-year-end-plan for neutral year-end planning reviews.

1. Load current portfolio, realized P&L, dividends, withholding, cash, FX, and cost-basis data when available.
2. Separate compliance evidence issues from planning observations.
3. Identify review items: missing 1042-S, unexpected withholding rates, missing historical statements, missing cost basis, concentrated unrealized gains/losses, and FX conversion assumptions.
4. Provide neutral planning scenarios, not instructions to trade. Phrase items as “review”, “confirm”, “model”, or “ask a tax professional”.
5. Avoid recommending tax-loss harvesting or transaction timing as a directive; present only calculation impacts and documentation needs.

Output Templates

Evidence Summary

Source	Tax year	Country	Income type	Gross original	Tax withheld original	Currency	Notes

China IIT Estimate

Country	Category	Income RMB	China rate	China tax before credit	Foreign tax paid RMB	Creditable tax	Estimated top-up	Excess carryforward

Treaty Withholding Sanity Check

Country	Income type	Gross	Withheld	Actual rate	Treaty reference	Review note

Year-End Planning Review

Area	Evidence / metric	Review point	Possible next step

Implementation Planning Guidance

When asked to implement commands or calculators, follow test-first development:

• Add deterministic pure functions for dividend/withholding aggregation, RMB translation, treaty sanity checks, and foreign tax credit calculation.
• Require failing fixture tests before implementation.
• Start with dividend/withholding Phase 1.
• Keep realized-gain support opt-in, STK-only, and backed by fixture tests before expanding scope.
• Preserve evidence records in output rather than only returning totals.

Additional Resources

• references/official-tax-rules-and-implementation-plan.md — official-source rule summary, formulas, web-app pattern review, output tables, and staged implementation plan.
• scripts/china_tax_self_check.py — deterministic local-file report generator for Flex XML/CSV, 1042-S CSV, RMB FX CSV, and IBKR tax-report ZIP evidence.