Brief Introduction To Foreigner Income Tax Policy

Resident taxpayers include individuals with a residence in the Chinese territory or those who do not have a residence in China but have lived in China for a whole year, whose incomes originating from both within and outside the Chinese territory are subject to income tax in China, should pay individual income tax according to the Law on Individual Income Tax of The People's Republic of China. Individuals without a residence in the Chinese territory but have lived in China for over a year and less than five years, whose incomes originating from outside the Chinese territory, with the approval of tax authority, the individual income tax can be levied merely on the payment from companies, enterprises and other economic organizations, or individual within Chinese territory. Individuals living in China for more than five years should pay the individual income tax on their whole incomes originating from both within and outside the Chinese territory.

Individuals without a residence in the Chinese territory but have lived in China for less than 90 days continuously or accumulatively during a taxation year, whose incomes originating from inside the Chinese territory and paid by the foreign employers and as the part not borne by the employers in China's institutions and territory shall be exempted from paying individual income tax.
 
    The following items are exempted from individual income tax:
 
 1.  Incomes of diplomatic representatives of foreign embassies and consulates, consular officers and other related staffs in China who conform to the relevant national regulations;
 
 2.  Foreign experts’ incomes from wages and salaries which conform to national regulations;
 
 3.  Foreigners’ housing allowance, meal allowance, relocation expenses and laundry fees in non-cash forms or in the form of cash reimbursement; and business travel allowance, home visit allowance, language training expenses and children’s tuition fees at reasonable levels;
 
 4.  Dividend and bonuses obtained from Sino-foreign joint ventures;
 
 5.  Incomes exempted from tax under international conventions and protocols signed by the Chinese government.





 Entities and individuals paying employees have the obligation to deduct taxes from their payments and pay the deductions to the tax authority.
 
    Under any of the following circumstances, a taxpayer shall file a tax return to the competent tax authority or entrust a tax agent with this job on his or her behalf:
 
 1.  The taxpayer’s annual income has exceeded RMB 120, 000;
 
 2.  The taxpayer has obtained wages or salaries from two sources within the Chinese territory;
 
 3.  The taxpayer has an income from outside of China;
 
 4.  The taxpayer has obtained a taxable income but the paying party has no obligation to deduct tax payments from the income.