China audit office says Bank of China avoided 2.37 billion yuan in tax

China's National Audit Office said Bank of China used affiliated financial institutions to package 11 private funds as public funds, taking advantage of tax preferences and "avoiding 2.367 billion yuan in tax" between April 2023 and August 2025.

The finding appeared in the "major risk audit" section of the State Council's report on the 2025 central budget execution and other fiscal revenues and expenditures. The report said auditors reviewed Agricultural Bank of China, China Everbright Group and Bank of China, and found that some institutions had used financial policy preferences for improper gain.

According to the report, Bank of China arranged two affiliated financial institutions as channels and filled the structures with large numbers of Bank of China employees and other investors contributing between 1 yuan and 100 yuan. The 11 private funds were then packaged as public funds, allowing them to use the income-tax exemption for public funds and avoid 2.367 billion yuan in tax.

Names not disclosed

The audit report did not name the two affiliated financial institutions or identify the 11 funds. It also did not say whether the tax had been repaid or whether any individuals had been disciplined.

As of publication, Ruibao had not found a public statement from Bank of China responding to the audit finding.

The report used the phrase "tax avoidance". It did not make a judicial determination. Whether the matter leads to tax recovery, administrative penalties or a criminal process will depend on later findings by the relevant authorities.

Private funds, public treatment

Public funds raise money from unspecified investors and are subject to different disclosure, fundraising and tax arrangements. Private funds are aimed at qualified investors and operate under different rules.

The phrase "adding heads" in the audit report refers to using large numbers of small investors to create the investor structure needed for a public fund, allowing the funds to appear eligible for public-fund tax treatment.

ABC and Everbright also named

The same report also cited other financial institutions. Agricultural Bank of China was accused of weak pre-loan review from December 2021 to August 2025, issuing 11.066 billion yuan in loans to projects that were not high-standard farmland projects. Some funds were allegedly diverted to wealth-management purchases and debt repayment.

China Everbright Group was accused of failing to control decision-making at some majority-owned subsidiaries, weak management of some directly controlled units, and allowing individual subsidiaries to misuse the "Everbright" name.

The National Audit Office placed the issues in its financial-risk section. The report points not only to a single tax issue but also to the use of licences, channels and policy preferences by large financial institutions.

Further action not yet disclosed

After the audit report, it remains unclear whether tax authorities will seek repayment or penalties, whether regulators will require Bank of China to rectify fund and channel businesses, or whether the bank will impose internal discipline.

Source note: This article is based on disclosures in the National Audit Office's State Council report on 2025 central budget execution and other fiscal revenues and expenditures. The report said Bank of China used the income-tax exemption for public funds to "avoid 2.367 billion yuan in tax"; this article follows that wording and distinguishes it from a judicial finding of criminal tax evasion. Before publication, please verify the exact page and link against the National Audit Office's official report or PDF.