Tax

Last updated on Mar 28, 2012


About Tax

Under some circumstances, foreigners in the city must pay taxes. Income tax is probably the most important and also the most unavoidable.

Basically, China's individual income tax is famous for its complication and rooms for different interpretation. Sometimes, even overseas tax consultants feel puzzled when they deal businesses relate to China for clients.

If you worked in a local company (domestic or foreign invested) or the local office of a foreign company, you may have your income tax handled by your company, otherwise, you'd better ask for help from experts, such as consultants from accounting firms (local or international) or officials who work for local taxation, finance administrations. Normally, you won't have a direct contact with local tax officials, unless you do business for your own.

Individual income tax in China charged mainly every month with different rates from 3 percent to 45 percent of the total income with threshold amount --4,000 yuan (US$636) for foreigners -- deducted. Generally, people gain more will be charged more. If your salary is higher than 100,000 yuan a month, you should pay almost half your income to Chinese government.

Tax Guide

Foreigners who live in China for more than 90 days within a year (from January 1 to December 31) must pay income tax on incomes received in the country.

If part of their income is paid outside China, but paid by local companies, organizations or individuals, they still need to pay income tax on those incomes.

From the sixth year they live here, they must also pay tax on any income derived outside China.

Foreigners who live in China for less than 90 days in a year ( from January 1 to December 31) shall pay income tax on income received in the country, which won't include the part paid by employers outside China or by Chinese branches of those employers.

Foreigners who leave China temporarily for 30 days once in a year (January 1 to December 31) or leave several times for a total of 90 days in a year (January 1 to December 31) won't get a time reduction on their records.

Unfortunately, besides the Chinese taxation rules, foreigners may also have their own countries' tax law. They may pay tax twice for their business in China if their homelands have no bilateral taxation agreements with China or preferential policies on tax.

If you are a citizen of a country which has a bilateral taxation agreement with China, the 90-day threshold will be extended to 183 days.


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