Beijing says 20% offshore insurance tax not new – and does not target Hong Kong
China’s State Taxation Administration (STA) on Friday clarified that the 20 per cent personal income tax imposed on gains from offshore insurance policies was not a new policy – and was not specifically targeting the Hong Kong insurance industry. The STA urged the market not to overreact to the policy, according to an unnamed official quoted by Shanghai-based digital media outlet The Paper on…
China's State Taxation Administration clarified on Friday that the 20% personal income tax on offshore insurance gains is not a new policy and is not specifically targeting Hong Kong's insurance industry. The tax applies to all overseas insurance gains and other investment earnings, regardless of the country or jurisdiction, according to an unnamed STA official quoted by Shanghai-based digital media outlet The Paper.
The STA urged the market not to overreact to the policy. This clarification came a day after major Hong Kong-listed financial firms' share prices plummeted following reports of the tax being imposed. The STA official stated that mainland tax residents have always been responsible for paying taxes on gains they receive globally, including from overseas insurance policies, in line with international practices.
The tax has been in place for years but was previously difficult to enforce due to lax international cooperation. Analysts believe the sell-off triggered by the news was overdone and potentially directionally wrong, as cross-border flows into insurance policies have historically been allowed within the market.
Written by urgent.news from SCMP Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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