China Launches 20% Tax on Offshore Trusts Held by Its Citizens

On Friday, July 24 2026, China’s Ministry of Finance and the State Taxation Administration announced a 20 percent tax on the appreciation of assets transferred into offshore trusts and a 20 percent annual tax on trust income. Unpaid taxes on assets transferred since January 2023 and on trust income received before 2026 must be settled within 90 days, after which larger arrears may be pursued and evasion could trigger back taxes, surcharges and fines.

ReutersChina to tax offshore trusts as authorities targets overseas wealth BloombergChina slaps 20% tax on offshore trusts - hundreds of billions at stake South China Morning PostChina Targets Offshore Trusts in Sweeping Wealth Tax Clampdown China's IT billionaires and wealthy individuals have used ghost companies and overseas listings in t. .

Offshore trusts—often established in Hong Kong or other low-tax jurisdictions—have been used by mainland families to shield wealth from domestic oversight. A high-profile inheritance dispute involving the late Zong Qinghou, founder of Wahaha Group, revealed billions held in such structures. Beijing began targeting offshore trusts in 2025; the July 24 announcement marks the first formal nationwide tax regime.

South China Morning Post

• 2025 – Beijing initiates a targeting campaign against offshore trusts.

Bloomberg

• July 24 2026 – Finance Ministry and State Taxation Administration issue joint statement; rules take effect.

Reuters

• January 1 2026 – Start of the period for which a 90-day grace window applies to trust income generated before this date.

Bloomberg

• The crackdown targets “hundreds of billions of dollars” of mainland wealth held offshore.

China Targets Offshore Trusts in Sweeping Wealth Tax Clampdown

• Hong Kong now holds $2.9 trillion in assets, surpassing Switzerland (Boston Consulting Group).

China's IT billionaires and wealthy individuals have used ghost companies and overseas listings in t. .

The joint statement specifies that:

Bloomberg

• A 20 percent tax applies to asset appreciation at transfer into an offshore trust.

Reuters

• Annual trust income—property-transfer income, interest, dividend or bonus—is taxed at 20 percent.

China to tax offshore trusts as authorities targets overseas wealth

• Individuals who become foreign citizens or permanent residents but retain main economic interests in China remain Chinese tax residents.

China's IT billionaires and wealthy individuals have used ghost companies and overseas listings in t. .

• A 90-day compliance window allows residents to declare and settle liabilities for trust income generated before January 1 2026; larger unpaid amounts may be recovered over an extended period.

China to tax offshore trusts as authorities targets overseas wealth

The sweep has already affected market participants. Putu Holdings, a Hong Kong online brokerage founded by former Tencent executive Li Hua, was fined $271 million (?400 billion won) for illegal offshore-investment brokerage, and its shares fell about 30 percent. Analysts note the crackdown could dampen the rapid growth of Hong Kong’s wealth-management sector.

China's IT billionaires and wealthy individuals have used ghost companies and overseas listings in t. .

“This is the first time China has released an official offshore trust tax guidance, that means the historical practice of using such structures for tax deferral practice will have no room,” — Oscar Liu, founder of JLT Trust and One Plus Holdings

Bloomberg

Individuals have 90 days from the July 24 announcement to report offshore-trust holdings and pay the applicable taxes. Failure to comply will trigger the extended recovery measures outlined in the joint statement. The finance ministry indicated the anti-avoidance provisions will remain in force, signaling a longer-term shift toward tighter oversight of cross-border wealth.

Reuters