What tax incentives can foreigners enjoy in China?

2024/01/05 13:17:49

The introduction of foreign personnel can promote the prosperity and development of our country. Considering the integration and influence of foreign personnel on our country, it will also affect the development and stability of our country to a certain extent. The government has also made specific provisions for personal income tax exemption projects for foreigners.

Under any of the following circumstances, taxpayers shall file tax returns in accordance with the law:

1. To obtain comprehensive income, you need to handle settlement and settlement:

2. There is no withholding agent for taxable income;

3. When taxable income is obtained, the withholding agent fails to withhold taxes;

4. Obtain overseas income;

5. Cancellation of Chinese household registration due to emigration abroad:

6. Non-resident individuals obtain wages and salary income from more than two places in China.

Taxpayers can use the mobile personal income tax APP or the Natural Person Electronic Taxation Bureau web terminal to declare online, or declare by mail, or directly go to the tax service office to declare.

Dividend tax benefits

Dividends and bonus income received by foreign individuals (including compatriots from Hong Kong, Macao and Taiwan) from foreign-invested enterprises are temporarily exempt from personal income tax.

Foreign experts’ salary income is tax-free

If one of the following conditions is met, the wages and salaries earned by foreign experts (including compatriots from Hong Kong, Macao and Taiwan) are exempt from personal income tax:

(1) Foreign experts directly sent by the World Bank to work in my country according to the World Bank’s special loan agreement;

(2) Experts sent directly by the United Nations to work in our country;

(3) Experts working in China for United Nations assistance projects

(4) Experts sent by the aiding country to our country to work on the country’s free aid projects:

(5) For cultural and educational experts who have worked in China for less than two years under a cultural exchange project signed between the two governments, their wages and salaries are borne by the country:

(6) For cultural and educational experts who have worked in my country for less than two years under the international exchange program of Chinese universities and colleges, their wages and salaries are borne by the country:

(7) For experts who come to work in China through private scientific research agreements, their wages and salaries will be borne by the government agencies of that country.

Foreign personal subsidies and allowances are tax-free

The following subsidy subsidies received by foreign individuals (including compatriots from Hong Kong, Macao and Taiwan) are temporarily exempt from personal income tax:

(1) Housing subsidies, food subsidies, relocation expenses, and laundry expenses obtained in non-cash forms or in the form of actual reimbursement;

(2) Relocation expenses obtained in the form of actual reimbursement due to taking a job or leaving the company in China

Excludes monthly or periodic payments made by employers to foreign employees in the name of relocation expenses;

(3) Domestic and overseas business trips subsidies obtained according to reasonable standards:

(4) Family visit expenses obtained within a reasonable amount. The reasonable amount only refers to the transportation between the individual’s place of employment and the place of his/her family (including the place of residence of spouse or parents) in my country and not more than twice a year. cost:

(5) The part of the language training fees and children’s education subsidies obtained by receiving language training in China and the children’s education in China, and the part is within a reasonable amount;

(6) Special circumstances for foreigners living in Hong Kong and Macao due to family reasons to enjoy six subsidies.

Since January 1, 2004, foreign individuals (excluding Hong Kong and Macao resident individuals) employed by enterprises in my country who live in Hong Kong and Macao for family and other reasons, travel between the mainland and Hong Kong, Macao, etc. every working day. regions, whereby domestic enterprises (including their affiliated enterprises) provide non-cash or reimbursable subsidies for housing, meals, laundry, relocation, etc. in Hong Kong or Macao. Those who can provide valid vouchers can be subject to review and confirmation by the competent tax authorities. Exemption from personal income tax. The aforementioned foreign individuals who receive subsidies for language training and children’s education in Hong Kong or Macau may be exempted from personal income tax if they can provide valid expenditure vouchers and other materials and are verified as reasonable by the competent tax authorities.

From January 1, 2019 to December 31, 2021, foreign individuals who meet the personal conditions of residents can choose to enjoy special additional deductions for personal income tax, or they can choose to enjoy tax-free subsidies such as housing subsidies, language training fees, and children’s education fees. preferential policies, but cannot be enjoyed at the same time. Once selected by a foreign individual, it cannot be changed within a tax year. Starting from January 1, 2022, foreign individuals will no longer enjoy tax-free preferential policies for housing subsidies, language training fees, and children’s education subsidies, and should enjoy special additional deductions in accordance with regulations.
































sources from CNVISA

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