Payment of Individual Income Tax

Residents and non-residents

An individual who is domiciled in China, or an individual who is not domiciled in China but has resided in China for an aggregate of 183 days or more within a tax year, shall be regarded as a resident individual. income received by a resident individual from within China or overseas shall be subject to individual income tax pursuant to the provisions of the Individual Income Tax Law of the People’s Republic of China.

An individual who is not domiciled in China and does not reside in China, or an individual who is not domiciled in China but has resided in China for less than an aggregate of 183 days within a tax year, shall be regarded as a non-resident individual. Income received by a non-resident individual from within China shall be subject to individual income tax pursuant to the provisions of the Individual Income Tax Law of the People’s Republic of China.

Annual reconciliation for comprehensive income

Foreign nationals, who are tax residents of China and obtain comprehensive incomes from salary and wages, remuneration for personal services, author’s remuneration and royalties in a tax year, shall fill in the Annual individual income Tax Return for Self-Filing and associated forms within the period from March 1 to June 30 of the following year, and do the annual tax reconciliation with the tax authority. Foreign nationals who meet one of the following conditions shall be exempted from the annual reconciliation of individual income tax:

(l) The conditions specified in the tax policy for exemption from the annual reconciliation are met;

(ll) The amount of tax withheld matches with the amount of the tax payable;

(lll) The conditions for refunding are met, but the claim of tax refunds is waived.

If foreign nationals are unsure whether the annual reconciliation needs to be done, they can seek guidance regarding relevant policies and assistance from the taxpayer service halls of local tax authorities.

Settlement channels: Local government service halls or tax authorities’ taxpayer service halls, Individual income Tax APP, and the Natural Person E-Tax Platform. Foreign nationals need to visit the local taxpayer service halls to apply for a registration code before the first-time use of the Individual income Tax APP or the Natural Person E-Tax Platform. Taxpayers can seek assistance from taxpayer service halls.

Foreign nationals who are non-resident individuals are not required to deal with the annual reconciliation.

Website address of the Natural Person E-Tax Platform: https://etax.chinatax.gov.cn

Enjoying preferential treatment under tax treaties

China has signed agreements on avoidance of double taxation with 114 countries(regions). Foreign nationals who are eligible for tax reductions or exemptions may judge by themselves the conditions for enjoying such treatment. They can choose to enjoy the treatment upon self-filing or through withholding agents, and relevant documentation shall be retained for future inquiries. For details of the agreements, please refer to the tax treaty section on the website of the State Administration of Taxation.

Website address of tax treaty section: https://www.chinatax.gov.cn/chinatax/n810341/n810770/common_list ssty.html