China has launched a global hunt for hundreds of billions of dollars in unpaid taxes going back decades as Beijing seeks to fill a deepening fiscal hole by targeting the ultra-rich. Authorities have stepped up scrutiny of overseas capital gains and investments, in some cases going back as far as 2000, in a campaign that comes as Beijing also seeks to significantly expand control of outbound capital flows.Chinese banks and other financial institutions have been instructed to review overseas investments by wealthy Chinese to check if income has been declared to Beijing’s tax authorities, according to foreign officials as well as Chinese bankers and family office managers.

Their efforts, part of a suite of tax reforms targeting the country’s wealthy — including offshore trusts — are focusing on gains made from purchases of real estate, equities, precious metals and cryptocurrencies, among other assets.

The retroactive nature of the campaign — with reviews in some instances going back more than 25 years — has been confirmed by multiple officials, bankers and advisers.

Over recent months Chinese banks have increasingly been co-ordinating with tax authorities to freeze wealthy depositors’ accounts until officials are satisfied that taxes on capital gains from overseas assets, accounts and trusts have been paid, one banker in southern China said.

“The normal practice is that those wealthy people will immediately pay the fines and taxes in cash to reactivate their account,” the banker said.

The timeframes applied to the tax hunt appear to vary widely. In one example, the head of one Shenzhen-based family office said his clients were asked for tax payments on offshore asset gains from 2017 to 2022. No explanation was given for the focus on that period.

The motivation for the new campaign is “clearly a fiscal one,” said Victor Shih, professor of Chinese political economy at the University of California San Diego.

China’s budget revenue, largely dependent on tax, has mostly plateaued since the pandemic, falling 1.7 per cent to 21.6 trillion yuan (US$3.2 trillion) in 2025. Total government revenue from land sales, once a core revenue source for the state, collapsed from a 2021 peak of 8.7 trillion yuan to 4.15 trillion yuan after a property market slump.

China last month also introduced sweeping tax rules for assets transferred into offshore trusts, closing a loophole long used by wealthy individuals to shelter assets overseas, according to a joint statement from China’s finance ministry and national tax bureau.

Under the new rules, income generated by offshore trusts will be subject to a 20 per cent tax at multiple stages.

A Singapore-based banker, who handles offshore assets for wealthy Chinese, said the offshore trust tax had “shocked” his clients.

“You have people who set up trusts for assets that are in the public domain, like shares in listed companies. During the days where IPOs were very prevalent, having the right trust structure would provide an income tax shelter. This new ruling has ended that advantage,” the banker said.

While some complex offshore structures may escape the new rules, many trust holders are expected to face one-off tax liabilities, with some likely to sell assets to cover the payments, experts said.

Chinese media reported on Wednesday that authorities appeared to have started levying a 20 per cent tax on dividends and on interest earned from offshore policies. Shares in Asia-focused insurance group Prudential fell 13 per cent in London following the report, while HSBC fell more than six per cent.

Together with a suite of tax reforms, the new policies will bring China’s taxation system more in line with that of the United States, under which American taxpayers are generally taxed on worldwide income.

“Regulators have steadily strengthened enforcement over cross-border capital flows, overseas income reporting and foreign exchange, narrowing the scope for wealthy Chinese to transfer assets abroad or structure their tax affairs through offshore vehicles,” Ye Yongqing, a Shanghai-based tax lawyer and partner at Anli Partners, said.

Ye added that Beijing is taking a “similarly restrictive approach to offshore trusts as the U.S. tax code, broadly rejecting their use by tax residents to defer or eliminate tax liabilities.”

And there are signs that stricter tax collection from China’s wealthy has borne fruit in recent years. Individual income tax revenue rose 11.5 per cent in 2025 on the back of earlier campaigns, including taxes on stock trading in Hong Kong. This far outpaces overall tax growth of 0.8 per cent, official data showed.

The head of an immigration firm with offices in China and New York said authorities are first targeting those rich Chinese who trade U.S. stocks through Hong Kong or other offshore channels.

She expected scrutiny to move to people with sizeable financial assets in overseas bank accounts, particularly in Hong Kong, and eventually to other forms of offshore wealth, including property.

Adding to the pressure on wealthy overseas Chinese was confusion over Beijing’s definition of tax residency. People who spend less than 183 days a year in China may still be treated as Chinese tax residents, regardless of what foreign passport or immigration status they hold, unless they formally give up Chinese nationality and stop living in China for most of the year.

David Lesperance, an Asia-based lawyer whose clients include wealthy families in Hong Kong and China, believed that AI has enabled Chinese officials to carry out forensic analysis of investment records at a much faster pace and at a lower cost than previously.