Expats in China Hit by New Individual Income Tax Rules

Expats in China Hit by New Individual Income Tax Rules
Nov 13, 2018 By eChinacities.com

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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I really hope their taxation comes with perks from the Chinese government. Like ease of processing Work Permit and Visa if you like to transfer to a new work. I think paying taxes signifies your a law abiding foreigner and a desirable alien in the Chinese soil.

Mar 18, 2019 07:46 Report Abuse



Wow! This is not "getting in line" at all. Once people start leaving en masse I think this new law will be changed. I enjoy being in China. I work hard. I know that I am helping build China's future. I am grateful for the opportunity that I have had to live here and work. That opportunity ends on January 1. The curtain falls; I am gone. I just told two of my fellow teachers about this, and both were shocked. Tell your friends--this is a big deal.

Dec 16, 2018 17:24 Report Abuse



Sure it is. The tax is not a huge imposition...it is a few hundred won per month. Under 500 on a salary of 13000. I should know...I've paid it. You say "I am gone" because of this new tax apparently...where are you going to go that has a lesser tax rate? Somalia? Any "advanced" country (Canada, U.S, Australia, Western Europe...etc) will have a considerably higher tax rate. For example Canada starts at approximately 20% (provincial and federal taxes combined) and goes up from there.

Jun 27, 2019 13:42 Report Abuse



To reply to the last two posters. Come off it guys...China is just getting in line with most of the countries in the First World when it comes to taxation.

Dec 05, 2018 22:56 Report Abuse



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