Chinese tax residents are required under existing law to pay individual income tax on their worldwide income, including returns from overseas insurance products, the State Taxation Administration said on Friday.
The administration made the clarification following market discussion about insurance policies purchased in Hong Kong, saying the taxation of such income is neither a new policy nor a measure specifically targeting the Hong Kong insurance market.
Under China's Individual Income Tax Law, Chinese tax residents are required to pay tax on their worldwide income, including taxable returns from overseas insurance products, an official from a department of the administration said.
"This is not a new policy, nor is it a measure specifically targeting the Hong Kong insurance market," the official said.
Requiring residents to pay tax on income earned abroad, including insurance payouts, is a common international practice and has been a basic principle of China's individual income tax system since the law took effect, the official added.
