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

**　　【Caixin Network】** 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 proceeds from the disposal of shares. Multiple tax attorneys confirmed this development to Caixin. This means that offshore structures, which have long been viewed as a gray area in tax enforcement, are now facing stricter tax oversight.

Citing people familiar with the matter, Bloomberg reported that relevant authorities in provinces and cities including Jiangsu and Shenzhen have already asked the owners of these trusts to file detailed financial information, including investment gains such as dividends and proceeds from the disposal of shares; Shanghai began at the start of 2025 to require the reporting of earnings information from the past two years. Some local tax authorities are seeking to tax investment gains at 20% and add additional fines; meanwhile, authorities in another province are requiring disclosure of gains obtained from offshore trusts over the past two years.