Two Departments: Individuals who transfer assets into offshore trusts or derive income through offshore trusts shall declare and pay individual income tax

According to Odaily Planet Daily, two government departments have issued an announcement regarding matters related to individual income tax on offshore trusts. If an individual transfers assets into an offshore trust or derives income through an offshore trust, such income falls under the categories specified in Article 2 of the Individual Income Tax Law of the People's Republic of China and must be declared and paid in accordance with the provisions of this announcement. The term "offshore trust" as used in this announcement refers to trusts established under foreign laws or other legal arrangements that have trust-like functions. "Other legal arrangements with trust-like functions" refers to foreign legal arrangements that are not established under the name of a trust but essentially perform similar functions, excluding financial products issued by banks, insurance companies, securities firms, fund companies, etc., that are regulated by the financial regulatory authorities of their country or region and conduct independent business operations facing unspecified customers while assuming risks. (Jinshi)