China eases uncertainty over offshore trust taxes before grace period ends
Por Themis Qi — South China Morning Post – News feed
Advertisement Wealth management Money Wealth China eases uncertainty over offshore trust taxes before grace period ends
New guidance exempts some offshore stock incentive trusts after an executive ‘successfully’ appeals tax treatment
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Themis Qi Published: 2:03pm, 21 Oct 2026 Updated: 2:06pm, 21 Oct 2026 China’s tax authorities are accepting reasonable explanations when enforcing new rules on offshore trust gains, according to an executive who says their appeal was successful, offering some reassurance as a 90-day grace period expires on Thursday.
The approach appears to be translating into greater clarity from regulators. Earlier this week, the State Taxation Administration published a question-and-answer series that suggested Beijing was implementing the rules in line with international practice.
“We successfully defended ourselves,” said a person familiar with the matter at a Hong Kong-listed mainland Chinese company, who asked not to be identified because the issue was sensitive.
About a month before the latest clarification was issued, the company was asked to pay tax related to an offshore trust for a non-Chinese executive. It appealed on the grounds that the vehicle was a stock incentive trust set up in 2021 before the company’s initial public offering (IPO), said the source.
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