Individual Investors Get Clarity From China’s Taxman on Overseas Income
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As Chinese tax authorities ramp up oversight of offshore investment income, some holders of overseas trading accounts have been left wondering exactly how that income should be calculated.
Some retail investors with recent run-ins with the authorities now have an answer.
Chinese tax residents, including long-term foreign residents, have to pay a 20% rate on the net profit earned from stock trades made during the calendar year, according to several investors who spoke to Caixin. Specifically, net profit means the sum of their realized gains minus the sum of their realized losses for the entire year.
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- Chinese tax residents, including long-term foreigners, must pay a 20% tax on annual net profits from overseas stock trades.
- Heightened enforcement began after China joined the Common Reporting Standard in 2017, boosting cross-border data exchange.
- All global income must be reported, regardless of broker location or CRS participation, with reminders sent to investors in 2023 and 2024.
- 1980：
- China's tax code required Chinese tax residents to report all their global income.
- 2017：
- China joined the Common Reporting Standard (CRS), improving access to cross-border financial data.
- 2018：
- The principle of reporting all global income was reiterated in the revision of the Individual Income Tax Law.
- After 2017：
- China obtained improved access to cross-border financial data via CRS, involving more than 100 jurisdictions.
- Since 2024：
- Chinese authorities started more proactively pursuing unpaid taxes on global income.
- By June 2025：
- A Shanghai resident received a reminder from the local tax office to review overseas income declarations for 2023 and 2024.
- By June 2025：
- A Hong Kong resident received a similar reminder and confirmed no additional tax was owed for 2023 due to net losses.
- 2025：
- More investors trading overseas stocks received reminders from Chinese tax authorities, as enforcement efforts became more visible.
- 2025：
- Chinese tax residents, including long-term foreign residents, must pay a 20% tax rate on net profit earned from stock trades made during calendar year 2025.
- CX Weekly Magazine
Aug. 8, 2025, Issue 30
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