Tax supervision "piercing through" offshore trusts: Which types of income are subject to taxation?

**　　【Caixin Net】** Some local tax authorities in China are stepping up tax scrutiny of offshore trusts, requiring the relevant trust owners to report detailed information on investment gains such as dividends and gains from the disposal of shares. Multiple tax attorneys have confirmed this to Caixin Net. This means that offshore structures, long regarded as a gray area in tax enforcement, are now facing stricter tax regulation.

According to people familiar with the matter cited by Bloomberg, relevant authorities in provinces and cities such as Jiangsu and Shenzhen have already required the owners of these trusts to file detailed financial information, including investment gains such as dividends and gains from the disposal of shares. In early 2025, Shanghai began requiring owners to report information on gains from the past two years. Some local tax authorities are seeking to levy tax at 20% on investment gains, along with additional penalties. In addition, authorities in another province are requiring disclosure of gains obtained from offshore trusts over the past two years.