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Clarifying taxes for foreign workers
July 26, 2010, Monday
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Print Edition
Print Edition
FOREIGNERS working In China are subject to taxation, and understanding who is affected and what taxes apply can be a vexing problem. The chart below summarizes the key provisions of a circular on non-resident worker taxes issued by China's State Administration of Taxation.
The Ministry of Finance, in answer to questions about non-resident taxes, has provided the following information:
1. Staff sent to China for specific construction projects are exempt from individual income tax, regardless of whether their wages and, living allowance are paid for by China or by the donor country.
2. Cultural and educational foreign experts, during their service period in China, are subject to taxation on wages and salaries. They are not required to pay tax on any housing, automobiles or medical care provided by Chinese employers.
3. All workers not covered in provision No. 1 above are required to pay income tax. However, individuals who work in China continuously for a period of no more than 90 days are subject to tax only on income derived from Chinese employers. They are exempt from tax on salaries and wages paid by foreign employers
4. International students in China whose living allowances and scholarships don't fall Into the category of wages and salaries are exempt from paying tax.
5. Foreigners working in China are exempt from paying taxes on certain benefits provided by foreign employers, including postage costs and office expenses, advertising costs, business entertainment, living allowances and travel costs.
The Social Assistance Service Center of Jiading offers consultation in matters related to district-level implementation of government tax policies.
The Ministry of Finance, in answer to questions about non-resident taxes, has provided the following information:
1. Staff sent to China for specific construction projects are exempt from individual income tax, regardless of whether their wages and, living allowance are paid for by China or by the donor country.
2. Cultural and educational foreign experts, during their service period in China, are subject to taxation on wages and salaries. They are not required to pay tax on any housing, automobiles or medical care provided by Chinese employers.
3. All workers not covered in provision No. 1 above are required to pay income tax. However, individuals who work in China continuously for a period of no more than 90 days are subject to tax only on income derived from Chinese employers. They are exempt from tax on salaries and wages paid by foreign employers
4. International students in China whose living allowances and scholarships don't fall Into the category of wages and salaries are exempt from paying tax.
5. Foreigners working in China are exempt from paying taxes on certain benefits provided by foreign employers, including postage costs and office expenses, advertising costs, business entertainment, living allowances and travel costs.
The Social Assistance Service Center of Jiading offers consultation in matters related to district-level implementation of government tax policies.
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