China Issues New Offshore Trust Tax Rules Impacting Copenhagen Expats

China has launched new tax rules for offshore trusts. The Ministry of Finance issued Announcements No. 21 and No. 15 of 2026. These rules set up a clear individual income tax system for overseas trusts. Placing assets into offshore trusts now triggers a tax obligation. China treats these transfers as sales of assets. Net gains will face a 20 percent tax rate.

• Tax rate: 20 percent tax on net gains from asset transfers to offshore trusts.
• Reporting rules: Mandatory annual tax filings during trust existence and settlement at liquidation.
• Grace period: 90 days to settle past tax debts without interest penalties.
• Data sharing: Automatic CRS financial data exchange links Denmark, China, and offshore banks.

The rules apply to Chinese tax residents. They also cover non-residents under specific conditions. Trust owners must submit annual tax reports while the trust exists. Final tax settlement is required when a trust liquidates. China offers a 90-day grace period. During this window, taxpayers can clear past tax bills without interest fees.

This change directly affects Chinese professionals and business owners living in Copenhagen. Many local expats hold cross-border assets or overseas family trusts. Denmark and China actively exchange financial data through the Common Reporting Standard. Offshore financial centers also share this information. Danish tax authorities and Chinese tax bureaus receive data on overseas accounts.

Holding dual tax ties or Chinese assets requires quick action. You should review your wealth structures right away. Local tax advisors in Copenhagen can help clear up your tax status. Make sure your offshore assets comply with both Danish and Chinese laws. Utilizing the 90-day grace period helps avoid costly interest charges and fines.