What income tax should foreigners pay in China? How to define?

Individual resident:

Individuals who have domicile in China or who have no domicile and have resided in China for 183 days or more in a tax year shall be residents. Individual residents shall pay individual income tax on their income derived from sources within or outside the territory of China.

Non-resident individual:

Non-resident individuals shall be those who have neither domicile nor reside in China, or those who have no domicile and have resided in China for less than 183 days in a tax year. Non-resident individuals shall pay individual income tax on their income derived from within the territory of China.

Therefore, when studying the tax issues of foreign personnel, we should first determine whether it is resident individual or non-resident individual in a tax year (one of our tax years is a natural year), and then calculate how to pay tax.

Calculation method of non-resident individual income tax:

According to the provisions of the Individual Income Tax Law, a non-resident foreigner (without domicile) who has resided in China for less than 183 days in a year is only required to pay tax to the Chinese government on his income derived from the Chinese territory. The specific tax payment rule is the salary income of the non-resident individual, and the taxable income amount shall be the balance of his monthly income less than 5,000 yuan. The specific algorithm can be seen in the following figure

Frequently asked questions about personal income tax paid by foreigners

1. How to solve the personal income tax problem if you are tax residents of both countries?

At present, China has signed bilateral tax agreements or arrangements with 110 countries and regions, which to some extent avoid the possibility of double taxation of taxpayers.

2. What are the penalties for foreigners who do not pay personal income tax?

If a foreigner fails to pay individual income tax in violation of the provisions of the Individual Income Tax Law, the relevant authorities will investigate the foreigner for legal liability in accordance with the laws and regulations. If a tax authority finds that a taxpayer provides false information, it shall order it to make corrections and notify the withholding agent. If the circumstances are serious, the relevant departments shall deal with the case according to law, bring it into the credit information system and impose joint punishment.