China Tightens Taxation of Offshore Trusts, Warns of Crackdown on Tax Evasion
China has required wealthy investors with offshore trust assets to declare them and pay tax. In October 2026, related personal income tax revenue exceeded 120 billion yuan, helping drive a 90% year-on-year increase in monthly personal income tax revenue. Tax authorities say they will investigate those who fail to declare their assets or file false declarations.
Chinese tax authorities say they will rigorously investigate tax evasion involving offshore trust assets, focusing on taxpayers who fail to declare their assets or file false declarations even after being urged to comply. Those involved in serious cases may be publicly identified. Intermediaries and individuals who encourage or assist tax evasion will also face action under the law.
Illustrative image related to personal income tax.（VietVance）
Citing data from Chinese tax authorities, the Financial Times reported that in October 2026, China collected more than 120 billion yuan (about $18 billion) in personal income tax from offshore trusts held by its citizens, helping drive a 90% year-on-year increase in personal income tax revenue that month.
China had required wealthy investors to declare their offshore trust assets by October 22, 2026, and begin paying 20% tax on the related gains. Tax authorities say most taxpayers have cooperated in the transition to the new system. Previously announced rules initially apply to income from offshore assets earned between 2023 and 2025.
The tax campaign has also affected the wealth management industry. Harry Yu, a senior partner at Hong Kong-based trust advisory firm Fung Yu Trust Services, said the tax collection effort has made significant progress, but the industry-wide adjustment is far from complete. Families still need to organize trust, private banking and investment records and address issues such as asset valuation and the interpretation of regulations.
Source: VietVance
