GO
| HSI1 | 25,668.03 | 0.00 | -- |
| HSCEI1 | 8,531.58 | 0.00 | -- |
| Back Zoom + Zoom - Block Traded | |
|
2026-08-06 10:53:54 Citi published a research report stating that PRU (02378.HK) shares fell sharply, mainly triggered by mainland media outlet Caixin's report that the mainland is expanding its tax net on offshore insurance through the Common Reporting Standard (CRS). Citi believes the market reaction has been excessive. The broker said that although the report appeared to suggest that the central government intends to tighten regulation to close a "long-standing loophole", the article itself acknowledged that the relevant tax cases were sporadic rather than nationwide, with some cases even traceable back to 2025 instead of representing new recent regulations. Citi believes the root of the issue lies in the long-standing ambiguity surrounding the definition of policy dividends under the "interest, dividends and bonus income" provision in the Individual Income Tax Law. Local tax authorities are currently citing this provision to levy a 20% tax rate on dividend income from offshore insurance policies, but this practice is highly controversial from a legal perspective. In fact, dividends from mainland insurance policies still remain clearly tax-exempt in practice. The broker noted that regulatory uncertainty will continue to cast a shadow over Hong Kong's insurance industry, but the structural demand for Hong Kong insurance remains unchanged. Its advantages include offshore asset allocation, multi-currency flexibility, access to global healthcare services and superior product design. Citi stated that unless there is a clear nationwide ruling clarifying the tax arrangements for income from offshore insurance policies, local tax authorities may still impose taxes based on their own interpretation of the Individual Income Tax Law, and any related media reports could trigger short-term market panic in the future. However, the broker believes the current selloff is panic-driven and excessive, while the structural demand for Hong Kong insurance remains solid. (ad/u)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |