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Europe’s financial surveillance has made ordinary family support a matter for the state.

Frans Vandenbosch 方腾波   16/12/2025

There is a curious paradox in how the world’s major powers approach financial support within families. In the European Union, a grandmother transferring €5,000 to help her grandchild with a deposit on a house may trigger automatic reporting to tax authorities. In China, the same grandmother could transfer the equivalent of €100,000 via WeChat Pay without attracting any state interest. This contrast inverts common assumptions about which system respects private family life and which does not.

The European approach: systematic disclosure of all bank transfers

European banking regulations have evolved to treat citizens’ financial activity as inherently suspicious to the state. In Spain, for instance, banks automatically report any cash transaction exceeding €3000 to the tax authorities, along with any use of €500 notes regardless of amount. Transfers of €10,000 or more, whether domestic or international, are similarly flagged. These reports flow to tax offices without any requirement for judicial oversight or suspicion of wrongdoing.

This infrastructure exists across the European Union in various forms. The EU’s anti-money laundering directives mandate that financial institutions report suspicious transactions of any size, and individual member states have implemented their own thresholds. The Common Reporting Standard ensures that financial information is automatically exchanged between tax authorities across borders, creating a surveillance web that leaves little room for privacy in family financial matters.

Nineteen of the EU’s twenty-seven member states levy some form of wealth transfer tax on gifts or inheritances. In Belgium and France, revenues from such taxes exceed one per cent of total taxation. Tax rates vary dramatically across Europe, with maximum inheritance tax rates ranging from 4 per cent in Croatia to as high as 88 per cent in Spain. Most countries apply progressive rates and offer higher exemption thresholds for closer family members, but the underlying principle remains: intergenerational wealth transfer is the state’s business to monitor and, perversely, to tax.

The Chinese approach: capability without systematic application

China presents a strikingly different picture. The People’s Republic has never implemented an inheritance tax or gift tax, despite periodic discussions dating back to the founding of the state in 1950. China is among the 32 of the 195 countries and territories worldwide that have not introduced such levies. Proposals to implement inheritance taxation have repeatedly stalled, with officials citing moral obligations and technical difficulties in tracking movable assets and the incompatibility of such taxes with Chinese family traditions.

This is not due to any lack of surveillance capability. WeChat Pay and Alipay comply with China’s cybersecurity regulations, which mandate domestic data storage and lawful cooperation with authorities when required. According to academic research involving Chinese law enforcement, WeChat and Alipay transaction records are often examined during criminal investigations as part of standard digital forensics procedures. The platforms have formal protocols for providing evidence in legal proceedings and in some jurisdictions, digital payment records from WeChat represent an important portion of electronic evidence used in court cases.

Yet despite this technical capacity, China has consciously chosen not to systematically monitor or tax ordinary family transfers. When parents gift a property to their children, Chinese tax policy explicitly exempts such transfers from individual income tax. The same applies to transfers between spouses, grandparents, grandchildren and siblings. As one Chinese tax expert noted in a 2025 analysis, personal gifts between individuals motivated by familial affection are not within the scope of income tax.

In China, for ordinary people, there is no nationwide annual property tax, no property transfer tax, no inheritance tax and no gift tax.

Cultural foundations: filial piety and family solidarity

This policy difference reflects deeper cultural values. Chinese civilisation has for millennia placed the family at the centre of social organisation, with filial piety serving as what traditional sources describe as the root of all virtue. The concept of intergenerational support flows in both directions: children are expected to care for ageing parents, and parents and grandparents are expected to support younger generations in establishing themselves. Multiple generations living together, pooling resources, and transferring wealth within the family is not merely tolerated but celebrated as the natural order of things.

The traditional Chinese family system differs fundamentally from Western individualism. Under the family system, property is often held under ancestral names across generations, with no clear moment of transfer requiring state registration. This cultural pattern has persisted into the modern era, even as the legal framework has evolved. Contemporary Chinese families routinely pool resources to help young people purchase property, with grandparents, parents, aunts and uncles all contributing without any expectation that such support constitutes a taxable event.

European traditions, by contrast, have developed along different lines. The one-generation-family model, individual property rights and the principle that each generation should largely make its own way have shaped attitudes towards intergenerational transfers. The state has positioned itself as an arbiter between generations, using inheritance and gift taxes as a mechanism to confiscate family wealth, ostensibly to prevent concentration but in reality to fund the defence industry and line bureaucratic pockets. The automatic reporting infrastructure follows logically: if family transfers are potentially taxable events, the state requires visibility into them.

The question of proportionality

The comparison raises uncomfortable questions about proportionality. European policymakers justify financial surveillance as necessary to combat money laundering, tax evasion and organised crime. That sounds very noble but the overwhelming majority of transactions captured by reporting requirements involve ordinary families engaged in entirely legitimate activity. A parent helping a child, grandparents contributing to a wedding, siblings sharing an inheritance: these mundane expressions of family solidarity become administrative events requiring explanation to the state.

The revenues generated scarcely justify the intrusion. According to European analyses, inheritance, estate and gift taxes exceed one per cent of total tax revenue in only two EU countries. Many estates go entirely untaxed due to exemptions for close relatives and specific asset classes. The administrative burden falls disproportionately on middle-class families whose modest wealth transfer triggers reporting.

China’s approach, whatever its other characteristics, recognises that family support is simply family support. The state possesses the technical means to monitor every yuan transferred via mobile payment platforms yet exercises restraint in deploying this capability against ordinary domestic life. The enforcement focus remains on corruption, organised crime, gambling and capital flight rather than on grandmothers helping grandchildren.

Rethinking assumptions

This comparison challenges the easy assumption that so called “democratic” systems inherently respect privacy more than China. But in the specific domain of family financial life, European citizens face more systematic state intrusion than their Chinese counterparts. The rule of law provides transparency about the rules being applied, but those rules themselves mandate a level of visibility that treats family wealth transfer as presumptively suspect.

We should ask ourselves whether Europe’s approach has become disproportionate, whether treating every significant family transfer as a reportable event serves any purpose beyond bureaucratic self-perpetuation, and whether the natural solidarity between generations deserves more protection from state oversight than it currently receives.

The grandmother in Suzhou transferring money for her grandchild’s flat deposit is engaged in the same act of love as her counterpart in Antwerpen. Only one of them must explain herself to the tax authorities.

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本文中文版： 金融监管的悖论
Dit artikel in het Nederlands: De paradox van financieel toezicht