Individual Income Tax for Expatriates in ChinaBy Dezan Shira & Associates

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Individual income tax in China is a complex subject, and changes to the system often occur – the Chinese tax authorities are currently considering increasing the minimum threshold at which individual income tax must be paid to RMB3,000 per month. While changes to China's tax regime that would affect expatriates are not expected, the central government has been known in the past to wait until February or early March to issue new implementation rules and so changes can't be ruled out.

The information in this article is the most up-to-date that we have. As with a lot of things in China, changes can happen quickly and we strongly urge those in need of tax advice to seek out professionals who will be aware of any changes to the tax regime.

Expatriates should be aware that newcomers must register for tax, work visas and residence permits, and those expats who worked in China during 2008 must still report separate annual IIT filings in addition to their monthly tax returns. There are financial penalties if this is not carried out for both sets of expat. Below we explain in detail.

To read the full version of this article, please purchase the January/February 2009 issue of China Briefing, which can be found in the Asia Briefing Bookstore. Companies requiring assistance may contact any Dezan Shira & Associates' nine national offices at china@dezshira.com for advice or visit www.dezshira.com.

For assistance and advice on individual income tax matters for expatriate personnel in China, please contact tax@dezshira.com.

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