FINANCE

China Expands Cross-Border Tax Push to Offshore Trusts

Published: Apr. 1, 2026 11:51 p.m. GMT+8

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The effort follows broader tightening of oversight of cross-border income under the Common Reporting Standard. Photo: VCG

Chinese tax authorities are stepping up scrutiny of offshore trusts, demanding that wealthy individuals disclose detailed investment income and, in some cases, pay a 20% levy on returns.

The move narrows a long-standing enforcement gray zone as officials use global information-sharing mechanisms to look through offshore structures often used by high-net-worth individuals to park assets and manage tax exposure.

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Chinese tax authorities demand disclosure of offshore trust income (dividends, disposals) and impose 20% levy on returns.
Local bureaus in Jiangsu, Shenzhen, Shanghai require details; Shanghai mandates past 2 years' income from early 2025.
60-70% of recipients pay after negotiations; targets weak/tax-driven structures via CRS.

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Who’s Who

King & Wood Mallesons: Ye Yongqing, a tax partner at King & Wood Mallesons, stated that China's scrutiny of offshore trusts is not a blanket audit; taxpayers get demand notices first. Cases are flagged for distributions to overseas accounts or equity-linked trusts. Authorities apply 20% tax on payouts; 60-70% of recipients pay after negotiations. Weak trust structures are targeted. (62 words)

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