China is casting a global net on offshore trusts to recover billions in historic tax arrears from high-net-worth individuals — a decisive move to rectify long-standing misconceptions about the tax treatments of offshore trusts.

On 24 July 2026, two complementary tax circulars were issued simultaneously. The first sets out the principles and detailed requirements for applying the existing individual income tax (IIT) framework across the entire lifecycle of offshore trusts. The second addresses administrative procedures and filing obligations. The new rules apply to resident-funded offshore trusts, as well as non-resident-funded offshore trusts that hold China-origin assets or distribute income to Chinese residents.

Crucially, a 90-day amnesty period is granted to voluntary disclosure for waiving late-payment surcharges on legacy IIT liabilities. The amnesty filing window will end on 22 October 2026.