China’s New Tax Rules for Foreigners Explained

China’s New Tax Rules for Foreigners Explained
Apr 02, 2019 By

The government has clarified how Chinas new tax rules for foreigners will affect expats. Since we reported in November last year that foreigners will be subject to the new Individual Income Tax (IIT) law, confusion has surrounded what exactly the new rules mean and how they will be implemented.

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While it was originally feared that the rules would make life harder for foreigners living in China, the pendulum seems to have swung in the opposite direction, according to China Briefing.

Last month, China’s Ministry of Finance and State Taxation Administration specified how long foreigners could stay in China before their worldwide earnings are taxed and how such metrics would be calculated. Whereas before expats could stay in China for five years before being subject to tax, they can now stay for six as part of a policy to attract high-level expats and foreign investment.

And six years is not always six years, as there are several exemptions that allow visitors to work around the rules. For example, a foreigner is only considered to have stayed in China for a year if they are in the mainland (not Taiwan or Hong Kong) for 183 days in a single calendar year. Any days in the mainland of under 24 hours are not counted.

The number of years spent in China will be calculated from January 1, 2019, meaning any time spent here before then is also not counted. And if you spend a total of 30 consecutive days outside of China at any time during the six years, the clock goes back to zero. Not so bad after all, then!

In addition, tax filing in China for foreigners is set to be streamlined so pre-approval for tax benefits is no longer needed. They can be enjoyed at the time of filing.

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Keywords: tax for foreigners in China China’s new tax rules for foreigners


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thanks, very useful.

Jun 19, 2020 17:37 Report Abuse



The task force has to be merge to make the more brialllant

May 19, 2020 20:38 Report Abuse



These rules are unenforceable since they have absolutely no way to find out how much foreigners earn outside of China. You can just declare zero income overseas and they can't even check whether it's actually true. China doesn't share banking data or any data with other countries and vice-versa, unlike say Western countries that share such data with one another. So good luck with that LMAO.

Jun 04, 2019 08:45 Report Abuse



Thank you for the article, very useful!

Apr 10, 2019 17:11 Report Abuse