China’s top auditor has accused one of the country’s biggest state-owned banks of exploiting investment fund structures to evade billions of yuan in taxes, as Beijing steps up efforts to strengthen financial compliance.Bank of China evaded 2.37 billion yuan (US$348 million) in taxes by misusing preferential treatment intended for publicly offered mutual funds between April 2023 and August 2025, according to the National Audit Office’s annual report released on Tuesday.The bank channelled investments through two affiliated financial institutions and recruited large numbers of employees as nominal investors, each contributing between 1 yuan and 100 yuan, to disguise 11 privately offered funds as public ones, the report said.Publicly offered mutual funds in China usually enjoy corporate income tax exemptions. The report said Bank of China improperly took advantage of those benefits.While the audit office reports tax-related irregularities every year, it is rare for it to publicly identify a major state-owned bank for tax evasion.The disclosure comes as Beijing intensifies efforts to crack down on tax evasion and strengthen oversight of the country’s sprawling financial industry.
Bank of China accused of exploiting tax preferences to avoid paying US$348m
The bank channelled funds through affiliates and mass employee investors to pass off private funds as public, China’s top auditor says.
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