Under CRS, trustees report settlors, beneficiaries, and protectors who are tax residents of participating jurisdictions — China included since 2018. BVI/Cayman/Singapore trusts report to China tax authorities. 'Confidentiality' is no longer a compliance strategy; classification of the trust (financial institution vs passive NFE) determines reporting depth.
CRS mechanics for trusts: (1) Classification: most family trusts are Passive Non-Financial Entities (Passive NFE) or Investment Entities depending on trustee management — Investment Entities report ALL controlling persons; Passive NFEs get looked through to control persons only if they pass control tests. (2) Who gets reported: settlors (even after settling), beneficiaries (when receiving distributions), protectors with control rights. (3) China context: China joined CRS exchanges 2018; Chinese-resident settlors of BVI/Cayman/Singapore/HK trusts are reportable. (4) Practical compliance: complete self-certification accurately (tax residency cannot just be 'nowhere'), align with China's individual tax rules on trusts (currently unsettled but evolving), and document everything. Non-disclosure discovered via CRS data + AEOI matching creates back-tax + penalty exposure.
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