What tax benefits do foreigners have in China
The personal income tax exemption items listed in Article 4 of the Personal Income Tax Law include the income of diplomatic representatives, consular officials and other personnel of various embassies and consulates in China that are exempt from tax in accordance with the relevant laws of our country, as well as international conventions and agreements signed by the Chinese government provides for tax-free income.
Foreigners are entitled to the following tax benefits during their stay in China: “Notice of the State Administration of Taxation on Issues Concerning the Tax Obligation of Individuals Without Domicile in China to Obtain Wages” (National Tax Law [1994] No. 148) stipulates that there is no domicile in China.
An individual who has worked continuously or cumulatively within 90 days in China within a tax year or has lived continuously or cumulatively within 183 days within the period stipulated in the tax treaty is paid by the employer outside China and is not the employer’s domestic institution in China Burdened wages and salaries are exempt from declaration and payment of personal income tax.
An individual who has no residence in China but has worked continuously or cumulatively in China for more than 90 days in a tax year or has lived continuously or cumulatively in China for more than 183 days but less than one year within the period stipulated in the tax treaty, works outside China Except for serving as directors and senior management personnel of enterprises within the territory of China (other provisions), personal income tax is not levied on wages and salaries earned during the period.
Tax exemption for foreigners coming to China
- Preferential personal income tax for foreign experts coming to China. For foreign economic, cultural and educational experts who come to China during service period, if implement free “three guarantees” for their housing, car use, and medical treatment, may levy personal income tax on wages and salaries in accordance with the tax law. The housing, car and medical treatment provided by the state free of charge are exempt from tax calculation.
- Preferential personal income tax for foreign aid personnel. For the staff sent by the aid country to our country to serve the country’s construction projects, the wages and living allowances, whether paid by our country or paid abroad, are exempt from personal income tax.
- Wages and salaries earned by foreign staff who come to China for service in China, regardless of whether they are paid by us, foreign payments, or joint payments by us and foreign countries, all income are derived from China, except for the tax exemptions provided above. Others shall be subject to personal income tax according to regulations, but for those who have lived continuously within 90 days in China, they may only pay tax on the part of the wages and salaries paid by us, and exempt the part of the wages and salaries paid abroad.
- Living allowances and scholarships for foreign students coming to China are not in the category of wages and salaries, and no personal income tax is levied.
- For foreign workers who come to China, the foreign-sponsored units shall pay the lump sums, including personal wages, public funds, and living allowances. Where the above income can be clearly divided, only the wages and salary income can be collected according to the regulations. Personal Income Tax.
- Relocation income obtained by foreign individuals due to work or resignation in China in the form of actual reimbursement is exempt from personal income tax. When tax returns are filed, the taxpayer should provide valid evidence and exempt the taxable portion of the tax.
- Domestic and overseas travel subsidies obtained by foreign individuals at reasonable standards are exempt from personal income tax. At the time of tax declaration, the taxpayer should provide the transportation expenses, accommodation fee certificate (copy) or the relevant plan for the enterprise to arrange the business trip, and the tax exemption that meets the prescribed standards.
- The family visit fee obtained by foreign individuals is exempt from personal income tax. Taxpayers should provide transportation expenses vouchers (photocopy) for visiting relatives, and tax exemption for their reasonable portion. The family visit fee for tax exemption is limited to the cost of foreign individuals traveling between the place of employment in our country and the place of their family (including the place of residence of spouse or parents) and no more than twice a year.
- The subsidies for language training fees and child education fees obtained by foreign individuals are exempt from personal income tax.
What tax incentives do foreign and foreign companies in China
In recent years, the following taxes have been unified in domestic and foreign investment:
- The “Decision of the Standing Committee of the National People’s Congress on the Application of Interim Regulations on Value-Added Tax, Consumption Tax, and Business Tax on Foreign-Invested Enterprises and Foreign Enterprises” reviewed and approved by the Fifth Session of the Standing Committee of the Eighth National People’s Congress provides that value-added tax, consumption tax, and business tax , Land value-added tax, resource tax, stamp tax, urban real estate tax, vehicle and ship use license tax, deed tax, etc. From January 1, 1994, domestic and foreign enterprises will be unified.
- The “Interim Regulations on Urban Land Use Tax of the People’s Republic of China” (Order No. 483 of the State Council) stipulates that urban land use tax shall be unified from January 1st, 2007 to domestic and foreign enterprises.
- The “Enterprise Income Tax Law of the People’s Republic of China” (Chairman’s Order No. 63) stipulates that corporate income tax will be unified from January 1, 2008 to domestic and foreign enterprises.
Provisions of the State Council on the Abolition of the “Interim Regulations on Urban Real Estate Tax”, “Measures for Collection of Maintenance Fees for the Main Route of the Yangtze River”, and “Measures for Collection and Use of Maintenance Fees for Inland Waterways” (State Council Order No. 546 of 2008) stipulate that property tax From January 1, 2009, domestic and foreign enterprises will be unified. - “Notice of the State Council on the Unification of Domestic and Foreign-funded Enterprises and Individuals’ Urban Maintenance and Construction Tax and Education Fee Surcharge System” (National law [2010] No. 35) stipulates that the urban maintenance and construction tax and education fee surcharge shall be effective from December 1, 2010 The domestic and foreign enterprises are unified.
- The “Interim Regulations of the People’s Republic of China on Ship Tonnage Tax” (State Council Order No. 610 of 2011) stipulates that the ship tonnage tax shall be implemented from January 1, 2012.
People with foreign capital and foreign enterprises in China apply the following preferential tax policies.
The Notice of the Ministry of Finance and the State Administration of Taxation on Allowing Deductions for the Calculation of Tax Payment for Housing Expenses of Foreign Staff in China (Foreign financial tax approval [1988] No. 21) stipulates:
(1) Foreign-invested enterprises and foreign-funded institutions in China renting houses or buying houses are free for foreign employees to live, and may not pay personal income tax on the income of their employees’ salaries and salaries.
(2) Foreign-invested enterprises and foreign-funded institutions in China will distribute housing fees to foreign personnel, which can be regarded as expenses, but should be included in the salaries and salaries of their employees. If the employee is able to provide accurate documents of housing expense vouchers, he may be permitted to deduct the taxable income according to the actual expenditure.
In addition, dividends and bonus income obtained by foreign individuals are exempt from personal income tax. For foreign individuals holding B shares or overseas shares (including H shares), dividends obtained from Chinese domestic enterprises that issue B shares or overseas shares ( Dividends) income, temporarily exempt from personal income tax; reasonable housing subsidies, food allowances and laundry fees obtained by foreign individuals in non-cash or reimbursable forms are exempted from personal income tax; Relocation income obtained is exempted from personal income tax; domestic and foreign travel subsidies obtained by foreign individuals at reasonable standards are exempted from personal income tax; family visit fees obtained by foreign individuals are exempted from personal income tax; language training fees and child education obtained by foreign individuals Fee subsidies are exempt from personal income tax.
Preferential taxation policies enjoyed by foreigners with special status.
The Notice of the State Administration of Taxation on the Issue of Tax Obligation to Obtain Wages and Salaries for Individuals Without Domicile in China (National Tax Law [1994] No. 148), the salaries and salary income of foreign journalists stationed in China should be in accordance with China’s personal income tax The provisions of the law are taxed. If it requires tax exemption, it should be based on the principle of reciprocity, that is, if the other country clearly stipulates the exemption of personal income tax for journalists of our news agency, our part will also be exempt from personal income tax of its correspondent in China.