State Taxation Administration of China responds to new overseas taxation policy: Residents’ overseas income is subject to tax in accordance with the law, and this is not a new policy.

China’s State Taxation Administration (STA) responded to recent discussions on taxing Hong Kong insurance gains, stating that Chinese tax residents must fulfill their tax obligations on global income in accordance with the law. Overseas insurance gains fall within the scope of taxable income; this is not a new policy nor is it specifically targeting the Hong Kong insurance market. The STA noted that individual residents’ overseas insurance gains and other investment income should be declared and taxed in accordance with the law, and relevant rules treat overseas income from different countries and regions equally. Caixin reported yesterday that, with the normalization of Common Reporting Standard (CRS) information exchange, Chinese tax authorities can now fully access dividend and cash value data of overseas insurance policies, gradually filling gaps in tax collection and management. Currently, the collection of taxes on insurance gains from overseas income has been initiated.