Expats in China are to face changes to their tax commitments as a new law on Individual Income Tax (IIT) comes into force. From January next year, both Chinese and foreign citizens will be required to abide by the new rules, according to internationalinvestment.net.
Photo: Nick Youngson
Whereas before foreigners we only required to pay Chinese tax on their worldwide income after living in the country for five years, the rule will now apply to anyone who stays for 183 accumulated days per year or more.
Tax will also now be calculated on an annual instead of a monthly basis, while the minimum threshold of tax exemption has already risen from RMB 3,500 to RMB 5,000 per month, or RMB 60,000 per year. Expat bonuses will also be taxed.
Expenses can however be deducted for items such as children’s education, elderly care, housing loan interest and rent, and the treatment of serious diseases.
IIT is the third biggest contributor to China’s total tax revenue after value-added tax and enterprise income tax, with Beijing collecting IIT worth RMB 1.2 trillion last year alone.
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Keywords: Expats in China
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in a few years time, expats will no longer bother to work in China which of course is what Chinese secretly want. Reform and opening up was a gimmick to get the best of the west in and then to use, copy it and finally say thanks but we don't need you anymore.
Dec 04, 2018 10:33 Report Abuse