The Hong Kong Federation of Insurers responds to rumors about taxation of overseas insurance policy income: official policy documents have not yet been released, and the Hong Kong insurance market is still competitive

The Zhitong Finance App learned that today (August 7), the Hong Kong Federation of Insurance Companies (HKFI) responded to the media in response to the recent rumor that “the Mainland levies 20% personal income tax on overseas insurance policy income”. The Hong Kong Health Federation said that up to now, the relevant departments have not issued official policy documents or implementation rules, and the Hong Kong Health Insurance Federation continues to understand and closely monitor related developments. Therefore, the Hong Kong Insurance Federation will not speculate or comment on the relevant discussions and rumors for the time being.

In response, the Hong Kong Insurance Federation stressed that it is expected that customers will still have strong demand for protection, wealth inheritance and asset allocation. As an international financial center, Hong Kong's insurance products have the advantages of flexible product design, multiple currency allocation, wealth inheritance planning and professional services. The Hong Kong Insurance Federation believes that for customers with relevant needs, the Hong Kong insurance market as a whole is still attractive and competitive.

According to reports, recently there were media reports that tax authorities in Beijing, Hangzhou and other places have levied personal income tax at a 20% rate on income such as dividends from overseas insurance policies (especially Hong Kong insurance policies) and interest on prepaid premiums. Among them, “20%” is not a new tax rate, but is treated in accordance with existing items such as “interest, dividends, and dividends”. In the past, due to unclear cross-border information, there was a lot of room for actual collection and administration of overseas insurance policy benefits; as the Common Reporting Standard (CRS) became more mature, mainland China could exchange insurance policy data with cash value through Hong Kong and other jurisdictions, and the gap in collection and administration gradually narrowed.

According to China's personal income tax law, Chinese resident taxpayers are required to pay personal income tax on their global income. In response, the Hong Kong Insurance Authority also stressed that Chinese residents have always been required to declare and pay taxes on overseas investment income in accordance with the law, so there is no need for excessive interpretation in the market.