Foreign Permanent Residents in China to Pay Taxes in Accordance with Chinese Laws

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Nov. 23 – According to the “Measures on the Relevant Treatment of Foreigners Holding Permanent Residence Permits in China (renshebufa [2012] No.53, hereafter referred to as the ‘Measures’)” jointly released by China’s Ministry of Human Resource and Social Security (MOHRSS), Ministry of Public Security (MPS) and 23 other ministries in October, foreigners in China with permanent residence permits shall pay taxes in accordance with Chinese laws.

The Measure clarifies that the Foreign Permanent Residence Permit is a valid identification certificate for foreigners who have obtained permanent residence status in China, and may be used independently. For foreigners holding a Foreign Permanent Residence Permit, their residence period in China has no time limit, and the Foreign Work Permit is not required when seeking employment in China.

With regards to income tax payments, foreigners in China with permanent residence permits should fulfill their tax duties in accordance with Chinese tax laws and regulations, as well as the relevant rules within tax agreements.

For income generated within the territory of China, it may be converted into foreign currencies and transferred overseas provided that taxes have been duly paid and a certificate of tax on foreign payments issued by the taxation authorities is presented. The Foreign Permanent Residence Permit can be used as identification certificate when conducting the foreign exchange business, based on the relevant provisions of foreign exchange administration.

Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia.

For further details or to contact the firm, please email china@dezshira.com, visit www.dezshira.com, or download the company brochure.

You can stay up to date with the latest business and investment trends across China by subscribing to The China Advantage, our complimentary update service featuring news, commentary, guides, and multimedia resources.

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