The U.S. announced on Tuesday the largest-ever tax penalty on a foreign executive after the Chinese government permitted Ross Tsai to return to China.
U.S. regulators proposed to impose a $388.9 million tax in connection with Mr. Tsai’s return to China. The SEC and IRS declined to say why.
“We are confident that this case will demonstrate that the U.S. government is committed to vigorously enforcing our laws and we remain committed to increasing visibility of Chinese-controlled and closely-held companies on our EDGAR Database to ensure that foreign shareholders are aware of the scope of these U.S. provisions,” said IRS Commissioner John Koskinen in a statement.
A filing in March by Ms. Tsai’s company and her father said that mainland China had made concessions to allow Ms. Tsai to return to China from New York and put her name on her father’s company. Both Ms. Tsai and her father are listed as managing directors of the family-controlled company, which is based in Zhongdian, a city in eastern China.
Earlier this year, China prevented American companies from selling to Zhongdian, and the United States targeted China for retaliation.
Mr. Tsai had not been aware of the penalties as of late Tuesday afternoon. A spokesperson for his company did not immediately return requests for comment.