Is Tax Payable on Illegal Income in China?

This article discusses an intriguing question: If an individual in China acquires illegal income, are they required to pay taxes on it according to the "Individual Income Tax Law of the People's Republic of China"? If taxes are owed, does this imply that such illegal income is recognized as legitimate income?

We will use the example of illegal funds being transferred abroad to explore this interesting issue: under Chinese law, is tax payable on illegal income? When funds are transferred out of China in violation of the "Foreign Exchange Control Regulations of the People's Republic of China" (hereinafter referred to as the "Regulations") and other relevant national laws and regulations, those funds are considered illegal. If these funds generate income abroad, such as dividends, interest, or capital gains, are they subject to taxation under the "Individual Income Tax Law of the People's Republic of China"? If taxes are due, does this mean the state acknowledges the legitimacy of the illegal funds? If the funds remain illegal, how should the taxes paid be treated?