Income Taxes💰For Expats in China You Must Know!
As a foreigner live and work in GZ, knowing how to pay tax is very important. What's more, the requirements for tax paying depend on your duration of residency in China.
Here, HACOS will help you figure out under what circumstances you should pay Individual Income Tax and how many you should pay.
What's Individual Income Tax?
It refers to individuals who have domicile in China or not domiciled but reside in China with the personal income sourced from China or outside China.
In accordance with relevant regulations, the expense deduction standard for foreign personnel is 4,800 RMB. Individual Income Tax is calculated based on personnel income gaining. Higher income, higher tax rate.
How to Calculate?
Notes:
(Per month) Tax payable income = income without tax - 4,800 (expense deduction standard);
Make sure the tax rate and quick calculating deduction amount accordingly by the range of income;
(Per month) Tax payable = taxable income * applicable tax rate - quick calculating.
For Example:
Pay tax with income from:
Tax depends on your duration in China
For those foreigner personnel who works in Chinese mainland, the liability of tax depends on your duration in China and the specific circumstances of the working agency.
1
Duration of residency: less than 90 days
Only gaining income from your work in China needs individual income tax paying (from 1st Jan to 31st Dec). Under specific circumstance, your duration of residency in China can be extended to 90-183 days based on the bilateral protocol.
2
Duration of residency: 90 days to 1 year
All kinds of income gained from Chinese companies or foreign firms in China need tax paying.
3
Duration of residency: 1 year to 5 years
Individual income both from Chinese and foreign firms during residency need to declare Individual Income Tax.
If you gain income both in China and outside China, there will be a combined tax calculation for domestic and overseas income. And you shall declare tax payment within the time limit as set in the Tax Law for their monthly payable tax.
4
Duration of residency: more than 5 years
The year after a five-year residency, you need to declare tax payment with all of your income both from China and outside China if there is a year-round residency, or merely income from China if there is less-than-one-year residency.
More taxes you may need to pay
Although you study and work in China, you may probably need to pay tax to your own country in accordance with relevant regulations.
However, if there is a bilateral protocol about taxation of China and your country, or if government of your country has no requirement of tax paying for citizen living overseas, you may have no need to pay extra tax!
Indeed, paying Individual Income Tax is a duty for each citizen! After knowing the details of Individual Income Tax for foreigners, can you figure out how many Individual Income Tax you should pay exactly in a month?
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