China’s tax clampdown brings in $30 billion from offshore trusts

Detailed summary

China’s tax clampdown raises S$30 billion from offshore trusts as Beijing targets wealthy taxpayers and tightens enforcement. Read more at straitstimes.com.

The collection marks Beijing’s most aggressive tax enforcement campaign in decades.

BEIJING – China’s ultra-wealthy have declared more than 160 billion yuan (S$30.7 billion) in back taxes tied to offshore trusts, bowing to pressure from the authorities increasingly eager to expand the tax dragnet far beyond their national borders.

The October receipts fuelled an almost 90% surge in national personal income tax revenue for the month, according to the official Xinhua News Agency, which said the vast majority of taxpayers cooperated proactively.

The authorities collected over 120 billion yuan of the haul in October, with some of the declared amount still to be paid.

The collection marks Beijing’s most aggressive tax enforcement campaign in decades as the authorities move to shore up state coffers by targeting the nation’s wealthiest people.

High-net-worth individuals were given until late October to pay bills on their overseas trusts without facing extra charges.

The report added that individuals who did not file their taxes or filed inaccurate information may face tax audits and public exposure.

The push followed an announcement in July that China would formally tax offshore trusts set up by its citizens, closing a loophole long used by business dynasties for asset protection and succession planning.

The tax authorities also assembled specialised task forces dedicated to auditing the ultra-rich, with some units assigned exclusively to scrutinise individual billionaires, Bloomberg previously reported.

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