Taxpayers in China have declared more than 160 billion yuan ($24 billion) in personal income tax on offshore trust income following the smooth conclusion of a policy transition period, the State Taxation Administration said Wednesday.
More than 120 billion yuan was collected in October alone, helping drive a nearly 90 percent increase in national personal income tax revenue that month, according to the administration.
The rules, issued jointly by the Ministry of Finance and the administration in July, provided a 90-day transition period ending Oct 22, allowing taxpayers to declare and pay without late-payment surcharges.
Offshore trusts are arrangements established under overseas law to hold and manage assets, often for inheritance planning and cross-border investment. Chinese authorities said some individuals have used such structures in jurisdictions with low taxes and limited transparency to conceal wealth and evade tax.
The July rules clarify taxation when assets enter a trust, while it operates and when it is wound up. For Chinese tax residents who place assets in offshore trusts, annual investment income and gains are subject to a 20 percent tax rate, including earnings retained within the structure. Income already taxed under the rules is not taxed again when distributed.
