Woofun AI reports that two departments have issued an announcement clarifying individual income tax obligations related to offshore trusts. Individuals must declare and pay taxes when transferring assets into such structures or receiving income from them, as these actions constitute taxable income under Article 2 of the Individual Income Tax Law of the People's Republic of China.

The announcement defines "offshore trusts" as entities established under foreign law or other legal arrangements with trust functions. This definition includes foreign arrangements that possess trust-like characteristics but are not formally named trusts, while explicitly excluding regulated financial products issued by banks, insurance companies, securities firms, and fund management companies that operate independently for unspecified clients.