China Chases 25 Years of Offshore Tax From Wealthy Citizens as Land-Sale Revenue Slumps
Updated
Updated · Asia Times · Aug 5
China Chases 25 Years of Offshore Tax From Wealthy Citizens as Land-Sale Revenue Slumps
3 articles · Updated · Asia Times · Aug 5
Summary
China is pursuing unpaid tax on offshore wealth going back as far as 25 years, with some wealthy families seeing mainland accounts frozen until they settle.
The crackdown follows July 24 rules that imposed a 20% levy on offshore trusts and a 90-day declaration window, closing a loophole that had let some public-market gains escape income tax.
Beijing is turning to offshore wealth as local-government finances weaken: land-sale revenue has fallen by more than half since 2021, while individual income tax receipts rose sharply last year.
Advisers say the retroactive reach is accelerating exit plans among rich Chinese families, who fear less the tax rate than the risk that previously legal structures can be taxed after the fact.
The campaign brings China closer to global practice on taxing worldwide income, but its blunt retroactive enforcement risks damaging confidence in rule stability and could foreshadow similar moves elsewhere under fiscal strain.