After the issuance of Order No. 837, a rumor began circulating among cross-border sellers: ”If your company has filed an ODI, the tax authorities will focus their attention on your overseas profits, making it more likely that you’ll be audited.”

As a result, many sellers have come to the conclusion that:Rather than taking on the ODI and ”asking for trouble,” it’s better to maintain the status quo and ”keep a low profile.”

That logic is wrong. And it’s dangerously wrong.

It’s not that ”if you do ODI, you’ll get caught,” but ratherBy completing the ODI, you’ll have records to refer to and a basis for your defense if you’re audited. The truly dangerous ones are, in fact, those sellers who ”did nothing”—when the day comes that you’re caught, you won’t even have the chance to explain yourself.

This article sets your logic straight.

I. If the tax authorities audit you, it’s not because you have an ODI

First, let’s look at a real-life chain of logic:

For sellers with ODI registration, the logic behind the investigation is as follows:

Tax authority system data comparison → Discovery of retained earnings in an overseas company → Request to verify dividend payments → You say: ”Yes, this company is mine. The ODI filing number is XXXXXX, and the source of funds is compliant” → Payment of back taxes on dividends → Case closed.

For sellers without ODI registration, the rationale behind the investigation is as follows:

Tax authority system data comparison (Golden Tax Phase IV + CRS + platform data feeds) → Discovery of an overseas company linked to you → You are unable to explain your relationship with this company → “Where did the money come from? Why does this company exist?” → Suspected foreign exchange evasion/money laundering → This is no longer just a matter of paying back taxes.

The same starting point, but completely different destinations.

II. ODI vs. No ODI: It’s a World of Difference After an Inspection

Has ODI filing—was ”selected for a random inspection”

The tax authority’s system comparison revealed that your overseas company had retained earnings → A letter was sent requesting verification of dividend payments → You submitted your ODI filing certificate and audit report → You paid the back individual income tax on dividends → Case closed.

Throughout the entire process, your status is that of a ”compliant business,” and the tax authority’s approach toward you is ”routine administration.” Even if you are required to pay back taxes, they will be calculated based on the statutory tax rate, and there will be no determination of tax evasion.

No ODI Filing—This Means You’ve Been ”Audited”

A cross-check by the tax authorities revealed that an overseas company is linked to your name → You were unable to explain your relationship to this company → “Where did the money come from? Why does this company exist?” → Suspected foreign exchange evasion/money laundering → This is no longer just a matter of paying back taxes.

You have been classified as a ”suspected target.” In addition to having to pay back taxes, you may also face administrative penalties, account freezes, or even criminal liability.

Item-by-item comparison:

✔️ Probability of being inspected: For those with ODI, it’s a routine spot check of existing data, so the probability is low. For those without ODI, the system automatically flags them as anomalies—that’s exactly what the Golden Tax Phase IV system is designed to do.

✔️ First Question from the Tax Authority: For those with an ODI: ”Are overseas profits being distributed as dividends in a normal manner?” This is a management-oriented question. For those without an ODI: ”What is the story behind this overseas company registered in your name?” This is an investigative question.

✔️ How much space do you have to answer: If you have an ODI, present your filing certificate and audit report, and explain it clearly in three sentences. If you don’t have an ODI, you can’t even clearly explain your relationship with this company—the more you say, the more mistakes you’ll make.

✔️ Handling: If you have an ODI, you’ll face back taxes and late payment penalties. If you don’t have an ODI, you’ll face a deadline to rectify the situation, the requirement to obtain an ODI, administrative penalties, account freezing, and possible criminal liability—the cost doubles with each additional “+” sign.

✔️ Worst-case scenario: If you have an ODI, pay the back taxes and continue operating. If you don’t have an ODI, once suspicions of currency flight or money laundering are substantiated, it’s not a problem that can be solved with money.

✔️ Rectification Window: If you have an ODI, you can take your time and plan ahead. If you don’t have an ODI, it’s urgent—the bank may freeze your account before notifying you. By then, you’ll no longer have a ”grace period”; you’ll only have a ”rescue period.”

The conclusion is simple: ODI registration is not a ”lightning rod,” but rather a ”lightning-proof vest.”

If you’re not wearing a lightning-proof jacket, a lightning strike will kill you instantly. If you are wearing one, a lightning strike will at most give you a little jolt—just a tax bill, really—and won’t cause any serious injury.

III. Why has the claim that ”people who filed ODI applications ended up being investigated” become so widespread?

Three reasons:

1. The tax authorities do indeed give priority attention to ODI companies—but this is not an ”audit,” it is ”oversight.”

It’s true that ODI companies are naturally under regulatory scrutiny. But ”being noticed” does not mean ”being investigated.” If you’re a legally operating company with verifiable records, being noticed is actually a good thing—if you’re ever selected for a random audit, the tax authorities will be able to verify your compliance status directly from the system and may not even need to request additional documentation from you.

2. Some sellers who have filed ODI returns have indeed been required to pay back taxes—but this is a matter of ”dividend compliance,” not an ”ODI” issue.

Some sellers have completed ODI registration, but their overseas companies have never distributed profits back to China nor reported individual income tax on foreign earnings. The tax authorities come knocking not because you’ve completed ODI registration, but because you’veThe tax treatment itself is non-compliant. ODI isn't taking the blame for this.

3. Sellers who haven’t done ODI are ”fine” for now—not because they’re safe, but because it hasn’t been their turn yet.

Once Order No. 837 takes effect, regulatory enforcement will only intensify—it will not ease up. Just because you haven’t been inspected today doesn’t mean you’re in the clear; it just means your turn hasn’t come up yet.

Are you aware of the risks your Hong Kong company structure faces under Order No. 837?Cell phone: 18676749275 ｜ WeChat: qcygscszk

”Note: ODI Assessment”—Qicaiying Consulting will provide you withODI Audit Risk Assessment—Including: the current risk level of the architecture, whether an ODI renewal is required, and the optimal time window for remediation.

IV. What Should You Do Now?

If your Hong Kong company has already filed an ODI registration:

 ✅ Verify that overseas profits are being repatriated as dividends in accordance with regulations and that individual income tax is being reported

 ✅ Verify that compliance records are complete and audit reports are in order

 ✅ If retained earnings have not been distributed as dividends, develop a dividend plan

If your Hong Kong company has not yet completed ODI registration:

⚠️ Assess as soon as possible whether you meet the requirements for reissuing an ODI (company establishment date, cash flow, and business records)

⚠️ The sooner you apply for a replacement, the higher the approval rate and the lower the cost. After Decree No. 837 takes effect, the requirements for retroactive registration will only become stricter.

⚠️ Don’t dwell on whether you’ll get caught if you do it—for every day you spend worrying, your window of opportunity narrows by an inch.

V. Qi Cai Ying: Experts in ODI Filing and Cross-Border Tax Compliance

Qicaiying Group has specialized in cross-border financial and tax compliance and overseas investment filing services for over 10 years, offering:

✅ Full-Service ODI Filing Assistance: Simultaneous processing across three channels—the National Development and Reform Commission, the Ministry of Commerce, and the State Administration of Foreign Exchange—with a one-stop service covering document preparation, application submission, and approval

✅ Tax Optimization for Existing ODI Clients: Dividend distribution planning, individual income tax filing for overseas income, and profit repatriation strategy design

✅ Emergency Workaround for a System Without an ODI Architecture: Assess eligibility for reissuance, design the optimal remediation plan, and provide full-service assistance throughout the process

ODI Audit Risk Assessment

Are you aware of the risks your Hong Kong company structure faces under Order No. 837?Cell phone: 18676749275 ｜ WeChat: qcygscszk

”Note: ODI Assessment”—Qicaiying Consulting will provide you withODI Audit Risk Assessment—Including: the current risk level of the architecture, whether an ODI renewal is required, and the optimal time window for remediation.

About Enterprise Caiying Group

Established in 2015 and headquartered in Shenzhen, Qicaiying Group specializes in providing one-stop financial, tax, and corporate compliance services to cross-border e-commerce companies and businesses expanding overseas. Its services include Hong Kong and overseas company registration, bank account opening, cross-border financial and tax compliance, ODI filing, VAT/EPR registration, bookkeeping services, and corporate identity planning. Having served over 50,000 companies to date, it is a trusted financial and tax compliance partner for cross-border sellers.

Cell phone: 18676749275 ｜ WeChat: qcygscszk