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CN Reportedly Strengthens Tax Crackdown on Offshore Trusts, Potentially Impacting Red Chip Listings
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The Chinese government is intensifying efforts to tax offshore trusts that hold shares of Hong Kong-listed companies, Bloomberg quoted sources as saying. Relevant departments in provinces and cities, including Jiangsu and Shenzhen, have required these trust holders to declare detailed financial information, including dividends and investment gains from share disposals. Shanghai has also begun requiring the reporting of income data for the past three years from early-2025. The strict scrutiny of offshore trusts is the latest blow to the red chip listing model, which allows Chinese companies to sell equity in overseas entities that hold domestic assets and businesses. The China Securities Regulatory Commission (CSRC) has taken measures this year to restrict red chip listings in Hong Kong, citing the need for increased transparency and strengthened compliance. Some companies planning for IPO are currently adjusting their corporate structures. AASTOCKS Financial News Website: www.aastocks.com |
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