Foreigners Continue to Benefit from Personal Income Tax Benefits

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On August 29th, the Chinese Ministry of Finance and the State Taxation Administration issued an announcement to further alleviate the tax burden on taxpayers. 

The announcement outlines the personal income tax policies related to subsidies for foreign individuals as follows:

1. Foreign individuals who meet the criteria for resident individuals can choose to enjoy special additional deductions for personal income tax. Alternatively, they can opt for the tax policies specified in the "Notice of the Ministry of Finance and the State Taxation Administration on Several Issues concerning Individual Income Tax" (CaiShuiZi [1994] No. 020), "Notice of the State Taxation Administration on the Implementation of Exemption and Reduction of Personal Income Tax for Foreign Individuals Receiving Relevant Subsidies" (GuoShuiFa [1997] No. 54), and "Notice of the Ministry of Finance and the State Taxation Administration on the Exemption and Reduction of Personal Income Tax for Foreign Individuals Receiving Subsidies for Housing and Other Expenses in Hong Kong, Macao, and Taiwan" (CaiShui [2004] No. 29). These policies provide tax exemptions for housing subsidies, language training fees, children's education expenses, and other subsidies, but they cannot be enjoyed simultaneously. Once foreign individuals make a choice, it cannot be changed within a tax year.

2. This announcement will be effective until December 31, 2027.

Editor: CH

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