The items exempted from personal income tax listed in Article 4 of the Individual Income Tax Law include the income of diplomatic representatives, consular officers and other personnel of embassies and consulates in China that should be exempted according to the relevant laws of China, as well as the income exempted according to the international conventions and agreements signed by the China government.
Expatriates enjoy the following tax benefits during their stay in China: The Notice of State Taxation Administration of The People's Republic of China on the Tax Obligation of Individuals Without Residence in China (Guo Shui Fa [1994] No.148) stipulates that individuals who have no residence in China and have worked continuously or cumulatively in China for no more than 9 days in a tax year or have lived continuously or cumulatively in China for no more than 183 days during the period stipulated in the tax agreement shall be paid by their employers outside China.
individuals who have no domicile in China and have worked continuously or cumulatively in China for more than 9 days in a tax year, or have lived continuously or cumulatively in China for more than 183 days but less than one year during the period stipulated in the tax agreement, shall not be subject to personal income tax on the wages and salaries earned during their work outside China, except for those who are directors or senior managers of enterprises in China (as otherwise stipulated).
Tax exemption regulations for foreign personnel coming to China
1. Preferential personal income tax for foreign experts coming to China. For foreign economic experts and cultural and educational experts coming to China, if we provide them with free "three guarantees" for housing, car use and medical care during their service in China, personal income tax can be levied only on wages and salary income in accordance with the provisions of the tax law, and the housing, car use and medical care provided by us free of charge can be exempted from calculation and tax payment.
2. Personal income tax concessions for foreign aid workers. Personal income tax can be exempted for the wages and living allowances of the staff members sent by the donor countries to serve the construction projects that the donor countries help China, whether they are paid by us or by foreign countries.
3. The wages and salaries earned by foreign workers who have served in China, whether paid by us, paid by foreign countries or paid by both of us and foreign countries, all belong to the income from China. Except for the above-mentioned tax exemption, all others should be subject to personal income tax according to the regulations. However, for those who have lived in China for less than 9 days continuously, tax can be calculated only on the wages and salaries paid by us and paid by foreign countries.
4. Living allowances and scholarships received by foreign students in China do not belong to the category of wages and salaries, and no personal income tax is levied.
5. For foreign workers coming to China, the foreign sending unit will give them lump sum, including personal salary, public funds and living allowance. Where the above income can be clearly divided, individual income tax can be levied only on the part of salary and salary income according to the regulations.
6. Personal income tax shall be exempted for the relocation income obtained by foreign individuals in the form of reimbursement for their employment or resignation in China. At the time of tax declaration, the taxpayer shall provide valid vouchers to exempt the reasonable part.
7. Foreign individuals are exempt from personal income tax if they receive domestic and overseas travel subsidies according to reasonable standards. At the time of tax declaration, the taxpayer shall provide the travel expenses and accommodation vouchers (photocopies) or the relevant plans for the enterprise to arrange business trips, which meet the prescribed standards for tax exemption.
8. Personal income tax shall be exempted for visiting relatives obtained by foreign individuals. Taxpayers should provide transportation expenses vouchers (photocopies) for visiting relatives, and the reasonable part is tax-free. The tax-free preferential fee for visiting relatives is limited to the fee for foreign individuals to take transportation between their places of employment and their families (including their spouses or parents' places of residence) and not more than twice a year.
9. The subsidies for language training fees and children's education fees obtained by foreign individuals are exempt from personal income tax.
What tax benefits do foreign investors and foreign enterprises enjoy in China
-In recent years, the following taxes have been unified in terms of domestic and foreign investment.
1. The Decision of the NPC Standing Committee on the Provisional Regulations on the Application of Value-added Tax, Consumption Tax and Business Tax to Foreign-invested Enterprises and Foreign Enterprises, which was deliberated and adopted at the Fifth Session of the Standing Committee of the Eighth National People's Congress, stipulates that the value-added tax, consumption tax, business tax, land value-added tax, resource tax, stamp duty, urban real estate tax, vehicle and vessel license tax, deed tax, etc. will be unified for domestic and foreign-funded enterprises from January 1, 1994.
2. The Provisional Regulations of the People's Republic of China on Urban Land Use Tax (the State Council Decree No.483) stipulates that the urban land use tax shall be unified by domestic and foreign-funded enterprises from January 1, 27.
3. The Enterprise Income Tax Law of the People's Republic of China (Presidential Decree No.63) stipulates that enterprise income tax will be unified for domestic and foreign-funded enterprises from January 1, 28.
4. the State Council's Regulations on Abolishing the Provisional Regulations on Urban Real Estate Tax, Measures for Collection of Maintenance Fees for the Yangtze River Trunk Waterway and Measures for Collection and Use of Maintenance Fees for Inland Waterway (the State Council Order No.546, 28) stipulates that the property tax will be unified for domestic and foreign-funded enterprises from January 1, 29.
5. The Notice of the State Council on Unifying the Additional System of Urban Maintenance and Construction Tax and Education Fee for Domestic and Foreign-funded Enterprises and Individuals (Guo Fa [21] No.35) stipulates that the additional system of urban maintenance and construction tax and education fee will be unified for domestic and foreign-funded enterprises from December 1, 21.
6. The Provisional Regulations of the People's Republic of China on Ship Tonnage Tax (the State Council Order No.61, 211) stipulates that the ship tonnage tax shall come into effect on January 1, 212.
-foreign capital and foreign enterprise personnel in China enjoy the following preferential tax policies.
The Notice of the Ministry of Finance and State Taxation Administration of The People's Republic of China on Granting Deduction of Housing Expenses for Foreign Employees in China (Caishuiwaizi [1988] No.21) stipulates that (1) enterprises with foreign investment and foreign institutions in China can pay personal income tax without counting their employees' wages and salaries when renting or buying houses for foreign employees to live for free. (2) Foreign-invested enterprises and foreign-funded institutions in China will issue housing expenses to foreigners, which can be classified as expenses, but should be included in the wages and salaries of their employees. If the employee can provide accurate housing expenses vouchers, he may be allowed to deduct them from the taxable income according to the actual expenditure.
In addition, dividends and bonus income obtained by foreign individuals are exempt from personal income tax. Foreign individuals who hold B shares or overseas shares (including H shares) are temporarily exempt from personal income tax on dividends (bonuses) obtained from enterprises in China that issue the B shares or overseas shares; Reasonable housing subsidies, food subsidies and laundry expenses obtained by foreign individuals in the form of non-cash or reimbursement are exempt from personal income tax; Personal income tax shall be exempted for the relocation income obtained by foreign individuals in the form of reimbursement for their employment or resignation in China; Personal income tax shall be exempted for domestic and overseas travel subsidies obtained by foreign individuals according to reasonable standards; Personal income tax shall be exempted for visiting relatives obtained by foreign individuals; The subsidies for language training fees and children's education fees obtained by foreign individuals are exempt from personal income tax.
—— Preferential tax policies enjoyed by other foreigners with special status. According to the Official Reply of the Ministry of Finance and State Taxation Administration of The People's Republic of China on Several Issues Concerning the Collection of Individual Income Tax (No.48 [198] of Cai Shui Wai Zi), the wages and salary income of journalists of foreign news agencies in China shall be taxed in accordance with the provisions of China's individual income tax law. If it asks for tax exemption, it should be based on the principle of reciprocity, that is, if the other country clearly stipulates that it is exempt from the personal income tax of our news agency reporters, we will also exempt the personal income tax of its news agency reporters in China.