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Tax policy for foreigners in China
June 27, 2011, Monday
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Print Edition
Print Edition
Q:WHICH kind of tax do foreigners need to pay in China? Who can enjoy preferential tax policies?
A:The State Administration of Taxation has promulgated some provisions regarding tax liability of individual income for people who have no residence in China.
1. Personal domestic income used in China. Any individual should pay tax.
2. Personal domestic income used outside China. Average employee who has resided in China for more than 90 days, or high-level managers who has resided in China for more than 183 days, should pay tax.
3. Income gained outside China used in China. Average employee who has resided in China for more than one year, or high-level managers who has resided in China for more than 183 days, should pay tax.
4. Income gained outside China used outside China. Only foreigners who have resided in China for more than five years should pay tax.
Meanwhile, Chinese Ministry of Finance has some conditions regarding personal income tax issues for foreigners working in China.
1. People who are sent by donor countries to work in assistance construction projects in China, can be exempt from personal income tax no matter if their wages are paid by China or the donor country.
2. In the period of cultural and educational foreign experts' service in China, we undertake their wages, salaries, housing, vehicle and medical expenses. They can only pay personal income tax for the wage and salary part according to relative policy.
3. On wages and salaries gained in China, no matter if they are paid by China or a foreign country, the foreign workers should pay personal income tax except related preferential tax policies in provision.
However, foreigners who have resided in China for less than 90 days should pay only for wages and salaries that are paid by China.
Foreign students in China needn't pay personal income tax for their subsistence allowance and scholarships because they are not wages or salary areas.
Foreign workers in China can only pay personal income tax for the salary part if they have a clear division of the different part of the money paid by their sending unit, which includes personal wages, public funds (postal fees, office expenses, advertising and entertainment fees) and subsistence allowance (housing costs, travel).
A:The State Administration of Taxation has promulgated some provisions regarding tax liability of individual income for people who have no residence in China.
1. Personal domestic income used in China. Any individual should pay tax.
2. Personal domestic income used outside China. Average employee who has resided in China for more than 90 days, or high-level managers who has resided in China for more than 183 days, should pay tax.
3. Income gained outside China used in China. Average employee who has resided in China for more than one year, or high-level managers who has resided in China for more than 183 days, should pay tax.
4. Income gained outside China used outside China. Only foreigners who have resided in China for more than five years should pay tax.
Meanwhile, Chinese Ministry of Finance has some conditions regarding personal income tax issues for foreigners working in China.
1. People who are sent by donor countries to work in assistance construction projects in China, can be exempt from personal income tax no matter if their wages are paid by China or the donor country.
2. In the period of cultural and educational foreign experts' service in China, we undertake their wages, salaries, housing, vehicle and medical expenses. They can only pay personal income tax for the wage and salary part according to relative policy.
3. On wages and salaries gained in China, no matter if they are paid by China or a foreign country, the foreign workers should pay personal income tax except related preferential tax policies in provision.
However, foreigners who have resided in China for less than 90 days should pay only for wages and salaries that are paid by China.
Foreign students in China needn't pay personal income tax for their subsistence allowance and scholarships because they are not wages or salary areas.
Foreign workers in China can only pay personal income tax for the salary part if they have a clear division of the different part of the money paid by their sending unit, which includes personal wages, public funds (postal fees, office expenses, advertising and entertainment fees) and subsistence allowance (housing costs, travel).
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