China’s local tax bureaus are stepping up enforcement now that the 90-day grace period for declaring offshore trusts has expired, issuing public disclosure orders to named individuals rather than only general reminders.
Municipal tax authorities in Beijing published notices for 21 individuals on the official website last Thursday — the day the grace period expired — ordering them to carry out a self-review of any offshore trusts they established or hold an interest in, and to submit the relevant documentation to tax authorities within 15 days.
Earlier this month, tax authorities in Qingdao, a coastal hub in Shandong province, issued a comparable but more pointed notice to a local taxpayer surnamed Sun. The notice said “data matching” had uncovered information relating to overseas financial accounts and directed the taxpayer to verify the nature of those accounts and submit documentation covering associated trusts and affiliated offshore listed companies.
Tian Zhiwei, a professor at Shanghai University of Finance and Economics, told the South China Morning Post that tax authorities likely already know who many of the named individuals are. “It is not wholly the case that tax authorities are unable to locate these individuals. Authorities may have already reached out to some of the people named in the notices before issuing them,” Tian said. He added that the public notices serve two purposes: building a documented procedural trail to support any later penalties or tax-recovery action, and signalling a warning to others who have not yet disclosed offshore holdings.
Background: China’s State Taxation Administration had set October 22 as the deadline for Chinese tax residents to declare and settle a 20% individual income tax on certain offshore trust income — including dividends and interest generated since January 2023 — with Bloomberg reporting that eight Chinese billionaires alone held an estimated US$140.2 billion through such offshore trust structures. That earlier enforcement push targeted voluntary compliance by the highest-profile holders; this week’s notices show tax bureaus now moving to compel documentation from a wider, named set of individuals once the voluntary window closed.
For Chinese tax residents who hold assets — including overseas property — through offshore trust or company structures, the practical point is that the authorities are treating silence past the grace period as a trigger for a formal paper trail, not as the end of the matter. Professor Tian’s comment suggests more such notices, in more cities, should be expected.
