China’s State Taxation Administration (STA) said taxpayers with offshore trusts must file and pay specified personal income taxes before Oct. 22 to avoid late-payment charges under a 90-day transition period.
The STA repeated the deadline in an Oct. 19 reminder. Filing alone does not qualify a taxpayer for the waiver: payment must also be completed within the window. The tax itself remains due, and covered amounts left unpaid after the deadline are subject to late-payment charges.
China’s Ministry of Finance and the STA issued the rules July 24. They define offshore trusts to include trusts governed by foreign law and qualifying foreign legal arrangements that perform similar functions. The temporary waiver applies to several categories of unpaid tax, each with its own qualifying period.
For China tax residents, one category covers unpaid tax on gains tied to property placed in offshore trusts from Jan. 1, 2023, through Dec. 31, 2025. The window also covers eligible taxes on income generated before Jan. 1, 2026, by trusts funded by China tax residents.
For nonresidents, the provisions cover unpaid personal income tax on China-sourced gains from placing property into offshore trusts between Jan. 1, 2023, and July 24, 2026. Certain distributions from nonresident-funded trusts to China tax residents also fall within the transition period.
Under the ongoing rules, income generated by resident-funded trusts and qualifying offshore entities those trusts hold, control or manage is taxed annually, whether or not it is distributed. Resident individuals may credit qualifying foreign personal income tax paid on the trust against their current Chinese tax liability.
Ministry and tax officials said in July that opaque jurisdictions with lower taxes had allowed some people to conceal assets and evade tax. Timely filers who pay what they owe can avoid the additional charges. The STA said it would provide filing guidance and services as taxpayers work toward the deadline before Oct. 22.
