China Auditor Accuses Bank of China of $348 Million Tax Evasion

Key facts

• Bank of China is accused of evading 2.37 billion yuan ($348 million) in taxes.
• The tax evasion allegedly took place between April 2023 and August 2025.
• The bank allegedly disguised private funds as public funds to exploit tax exemptions.
• This scheme involved repackaging 11 private funds and using employee capital contributions.
• Bank of China has responded, stating it accepts the audit findings and is implementing corrective actions.

China's National Audit Office has accused Bank of China Ltd. of evading approximately 2.37 billion yuan ($348 million) in taxes between April 2023 and August 2025. The accusation stems from the bank's alleged use of its affiliates to repackage 11 private funds into tax-exempt public funds, thereby exploiting preferential policies.

The audit report, released Tuesday, detailed how the bank arranged for subordinate financial institutions to act as conduits. To meet regulatory requirements for public funds, Bank of China reportedly mobilized its own employees to contribute small amounts, ranging from 1 to 100 yuan, to these private fund products. This tactic allowed the bank to formally present them as public funds, which are exempt from corporate income tax on earnings from trading stocks, bonds, and other securities.

The National Audit Office characterized this behavior as "exploiting financial preferential policies for improper gains," highlighting a breach in compliant operations and regulatory arbitrage. Bank of China responded swiftly, stating it sincerely accepts the audit oversight and is advancing rectification measures to address the identified issues and enhance risk management capabilities.