Enhanced overseas stock trading tax regulation, profits and losses offset within the same tax year are subject to a 20% tax.

Since the beginning of this year, many individuals engaged in trading US and Hong Kong stocks have received messages or phone calls from the tax authorities, reminding them to self-check overseas income and actively declare taxes. Some implementation guidelines have gradually become clearer, such as the offsetting of overseas stock trading profits and losses for tax purposes on an annual basis. Wu Libin, director of the Beijing Ming Tax Law Firm, said that there are some issues in practice that need further improvement, such as the maximum five-year loss carryover period for corporate income tax, whether personal income tax on the transfer of foreign financial products can also be offset by losses, whether annual losses can be offset by losses forward or backward. Overseas stock trading profits and other income from the transfer of foreign property are subject to a 20% tax rate for individuals, and in practice, individual dividends, interest, and dividends income obtained from within the country are also taxed at a 20% rate. However, currently, capital gains from A-share trading are exempt from individual income tax. The Ministry of Finance and the State Administration of Taxation have announced that income from the transfer of shares of listed companies by individuals has been temporarily exempt from individual income tax since January 1, 1997. Among various ways of trading overseas stocks, the income from the price difference of Hong Kong stocks traded through the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect is also temporarily exempt from individual income tax until December 31, 2027. In addition to income from trading US and Hong Kong stocks, the recent self-check and declaration reminders received by taxpayers also involve other types of capital gains such as interest, dividends, and bonuses. It is observed that the tax authorities' pursuit of information on residents' overseas income mainly relies on the CRS account information already received by China. This is the information reporting and exchange rules established by the Organization for Economic Cooperation and Development to combat tax evasion and maintain effective tax systems. China has participated in the CRS since 2017 and first exchanged information with foreign parties in September 2018. Currently, over 100 countries and regions have joined the CRS.