Recently, the Chinese government has further strengthened the investigation of residents’ individual overseas income tax. The State Administration of Taxation announced on January 16 that tax authorities are continuing to strengthen the publicity and guidance on the taxation of residents’ individual overseas income, reminding taxpayers to self-assess the income obtained from overseas from 2022 to 2024. This centralized emphasis on overseas income by the Chinese government comes against the backdrop of ongoing economic weakness and increasing local fiscal pressures, attracting attention and interpretation from the public.
According to Xinhua News Agency, under the provisions of the Tax Collection and Administration Law, if Chinese taxpayers fail to declare taxes or make calculation errors resulting in underpayment or non-payment of taxes, tax authorities can collect back taxes and penalties within three years; tax evasion cases will be dealt with accordingly.
Previously, several financial and tax experts have pointed out that the declaration and taxation of individual overseas income by residents is not a new tax obligation and has its foundation dating back to the initial implementation of the Individual Income Tax Law in 1980. However, the recent official emphasis on the enforcement of this provision has sparked discussions on the policy background.
Financial blogger “Zaiye Shuo,” with a following of 105,000, analyzed that the official “guidance and reminder for self-assessment” actually signals a much stricter stance than what is stated.
In layman’s terms, it means that every penny earned overseas in the past three years must be accounted for and taxes paid on it without exception. For many Chinese residents with overseas income, this is not just a notification but a cold shower from head to toe, according to “Zaiye Shuo.”
The official clarification that the timeframe is set between 2022 and 2024 implies that previously overlooked incomes are systematically being recalculated. Many individuals thought past incomes went unchecked, but now they are being given a timetable to recalculate their finances. Late payment fines are imposed daily, adding to the pressure. The tax authorities are well aware of people’s concerns, hence the urgent publicity campaigns.
“Zaiye Shuo” noted that the official claim that this is an international standard is to safeguard the country’s tax revenue. However, what worries people more is that this message comes in the current economic climate where finances are tight and jobs are scarce, leading many to believe that the government is intensifying its efforts to collect money.
Shanghai financial blogger “Mei Da Shi,” with over 100,000 followers on various social platforms, recently observed numerous closures of shops on Sichuan Road, a once bustling area in Shanghai.
He lamented that with the significant reduction in government tax revenue, the National Taxation Administration has bluntly stated that individual overseas income must be taxed.
In fact, this nationwide official “reminder” is not the first of its kind. On November 11, 2025, tax departments in Beijing, Shenzhen, and six other regions issued nearly identical notices stating that through big data analysis, some residents were found to have received overseas income but failed to declare and pay taxes on it. After reminders and policy guidance from tax authorities, individuals have since declared and paid the taxes on their overseas income.
The disclosed cases from the aforementioned notice revealed that a resident in Xiamen had to repay nearly 7 million yuan in taxes and late payment fines, while another resident in Sichuan had to pay close to 6.7 million yuan. It is stated that tax authorities tracked these cases through big data analysis.
“Zaiye Shuo” warned that the scope of overseas income coverage is much broader than many people imagine. Under current regulations, individuals with a residence in China or those who have lived in China for 183 days within a tax year are considered Chinese tax residents. Individuals meeting these conditions are required to declare and pay taxes on wages, service fees, investment dividends, interest, royalties, and property transfer income earned overseas.
He pointed out, “You may think that overseas income only concerns big bosses, but in reality, remote work, overseas contracts, investing in US stocks, or receiving dividends may all be included.”
Official reports indicate that tax authorities have been comparing and screening overseas incomes with the help of big data analysis. Several financial and tax experts also mentioned that China has joined the Common Reporting Standard (CRS) for the automatic exchange of financial account information and has implemented the automatic exchange of financial account information with over 100 countries and regions, significantly increasing the transparency of overseas financial accounts and assets.
“Zaiye Shuo” emphasized, “It’s not that the rules have changed, but they are being enforced more rigorously.” He noted that previously deemed relatively secure overseas accounts and structural arrangements are rapidly losing their secrecy in the face of CRS and big data.
For individuals relying on cross-border income as a “way out,” this trend not only increases compliance costs but also imposes a psychological burden. “You may think you have mitigated the risks, but you are only re-entering the system in a different way,” according to “Zaiye Shuo.”
He pointed out that over the past decade, China’s tax system has been a constantly expanding web, and now, this web is contracting and constricting more tightly. With the economy on a downturn and local fiscal deficits widening, the accelerated scrutiny of overseas income is seen as a reintegration of “overseas money bags” into regulation. This transformation has led many to feel that their assets, income, and exit strategies are all simultaneously narrowing.