China imposes tax on offshore trusts

Business

Taipei Times

Chinese authorities overhauled rules late last month to apply a 20 percent tax on appreciation and annual income from offshore trusts, and tax offices in cities such as Beijing and Hangzhou have begun enforcing taxes on returns from offshore insurance policies. Unpaid taxes on assets placed in trusts since January 2023 and trust income received before this year must be reported within 90 days, prompting some wealthy people to consider unwinding trusts, selling assets or borrowing to pay bills. The actions, backed by greater data links like the Common Reporting Standard and Golden Tax Phase Four, could slow southbound flows and signal broader fiscal tightening.

Offshore trusts now face 20 percent taxation in China