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

**　　【Caixin Global】** In certain local jurisdictions in China, tax authorities are stepping up scrutiny of offshore trusts for tax purposes, requiring the relevant trust owners to file detailed information on investment gains such as dividends and proceeds from the disposal of shares. Multiple tax attorneys have confirmed this development to Caixin Global. This means that offshore structures, which have long been viewed as a gray area in tax enforcement, are now facing tighter tax oversight.

据 Bloomberg, citing people familiar with the matter, relevant authorities in provinces and cities including Jiangsu and Shenzhen have already required the owners of these trusts to report detailed financial information, including investment gains such as dividends and proceeds from the sale or disposal of shares. At the beginning of 2025, Shanghai began requiring reporting of the income information for the past two years. Some local tax authorities are seeking to levy a 20% tax on investment gains and impose additional fines; meanwhile, authorities in another province are seeking disclosure of gains obtained from offshore trusts over the past two years.