China offshore trust tax push affects Xiaomi founder, 7 other billionaires
China's tax authority has reminded offshore trust taxpayers to declare and pay personal income tax by Thursday, potentially affecting eight Chinese billionaires with combined assets of about US$140.2 billion, Bloomberg reported. The list includes Xiaomi's Lei Jun, NetEase's Ding Lei and Pinduoduo's
China's tax authority has issued reminders for offshore trust taxpayers to declare and pay personal income tax by Thursday, a move that may affect senior representatives of Xiaomi (1810), Pop Mart (9992) and several technology and biopharmaceutical companies, Bloomberg reported.
Eight Chinese billionaires and their beneficiaries among the world's top 500 wealthiest individuals may be affected by the State Taxation Authority's measures, the report said, together holding assets worth about US$140.2 billion (HK$1.09 trillion) as of last Friday.
According to Bloomberg's documents and Billionaires Index, the eight billionaires hold assets through trusts in places such as the British Virgin Islands and the Cayman Islands. They include NetEase's (9999) founder and chief executive William Ding Lei, holding about US$37 billion of offshore assets, and Pinduoduo founder Colin Huang Zheng, with assets of about US$29 billion. They rank 51st and 80th on the rich list, respectively.
Other billionaires include Xiaomi chairman Lei Jun, with assets of about US$20.7 billion, Hansoh Pharmaceutical (3692) founder and chairwoman Zhong Huijuan, with about US$15.8 billion, and China Hongqiao (1378) chairman and chief executive Zhang Bo and his family, with about US$15.4 billion.
In addition, Pop Mart chairman Wang Ning owns shares of about US$10.2 billion, SITC International (1308) shareholder Yang Shaopeng has about US$6.9 billion in assets, and Anta Sports (2020) chairman Ding Shizhong holds about US$5.2 billion in shares.
A Hongqiao spokesperson told Bloomberg that linking its founder Zhang Bo and company management to changes in tax policy is unfounded and misleading.
The tax policy adjustment impacts established trust funds more severely, said Kevin Woo, a partner at Hong Kong law firm Ince & Co. Kylie Luo, practice leader of BDO Singapore asset and wealth management (tax), said some families are already considering simplifying their offshore financial arrangements or studying restructuring or terminating certain structures, while the number of family offices set up has increased this year.