Home > Tax Filing > Individual Income Tax in Mainland China

Individual Income Tax in Mainland China

Updated:2018-5-29 16:58:55    Source:www.tannet-group.comViews:217

Individual income tax in Mainland China is one of the concerns among foreign expats working or doing business there. China’s Individual Income Tax (IIT) Law stipulates that all individuals working and deriving income from within the territory of China are subject to IIT. While Chinese nationals are taxed on all income sourced both domestically and overseas, non-Chinese nationals are only taxed on income deriving from within China. Consulting with a China taxation specialist can help optimize one’s overall income to achieve the most profitable package for you or your employees. Tannet is there to help you.

Determination of IIT liabilities in Mainland China
According to the IIT law and regulations in Mainland China, a foreigner may be subject to IIT in Mainland China on his/her income sourced in Mainland China and/or on his/her worldwide income. The factors relevant to determine the IIT liabilities on employment income in Mainland China include the number of days the foreigner stays in Mainland China (the threshold is generally 90 days, 183 days, 1 year and 5 years), the source of the income payment (i.e. paid in Mainland China or abroad) and the position/title the foreigner holds (i.e. top management or general employee).

Please note that in case a foreigner who stays in Mainland China for 5 successive years and for every single year, the foreigner is absent from Mainland China for not more than 30 days for a single trip or not more than a cumulative total of 90 days over a number of trips within the same year, starting from the sixth year, he/she will generally be subject to Mainland China IIT on his/her worldwide income.

Expatriates and their employers should there seek to ensure IIT is being paid in a correct and timely fashion, and to conduct annual declarations.

Tax Preferential Treatments for Foreigners
Foreigners are entitled to IIT exemption on certain employment benefits which include the following:

(1) housing allowance;
(2) meal allowance;
(3) relocation benefits;
(4) laundry benefits;
(5) business trip allowance;
(6) language training benefits;
(7) children education benefits.

Please note however that certain conditions have to be satisfied in order to enjoy the tax exemption on the above allowances/benefits.

Contact Us
If you have further queries, don’t hesitate to contact Tannet anytime, anywhere by simply visiting Tannet’s website, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143512 or 86-755-82143181 or emailing to You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020, Dongmen Rd South, Luohu, Shenzhen, China.

Previous:China Corporate Income Tax Deductions     Next:China Individual Income Tax for Expats