Hong Kong insurers' shares slump on report China to tax offshore insurance income
Chinese mainland tax authorities have reportedly started levying personal income tax on returns from offshore insurance policies, the latest sign of greater scrutiny of offshore investments.
Hong Kong insurance shares plummeted on Thursday following a report that Chinese authorities began imposing personal income tax on returns from offshore insurance policies. Caixin news outlet claimed that Beijing and Hangzhou authorities are levying a 20% tax on returns from Hong Kong insurance policies, including dividends and interest on prepaid premiums.
Major insurers like Prudential and AIA Group saw their Hong Kong-listed shares drop by 8.2% and over 5%, respectively. The tax news raised concerns about potential slowdown in sales of insurance policies and other financial products to mainland Chinese customers. Hong Kong was Prudential's biggest profit contributor in 2025, and its London-listed shares fell by up to 13% on Wednesday.
Analysts suggested the move would make Hong Kong insurance products less attractive compared to domestic options, but could also alleviate fears of a potential ban on offshore insurance sales.
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