The strong economic strength will inevitably have a lot of foreign capital and talent influx, so there are more and more foreign personnel working and engaging in business activities in our country. So how do you determine whether foreigners need to pay tax? What conditions can enjoy preferential tax policies of our country? Many companies have such a similar problem, now we help you answer questions!

According to Article 1 of the Individual Income Tax Law, an individual who has a domicile in China or who has no domicile and has resided in China for 183 days or more in a tax year is a resident individual.

1. Domicile standard The "domicile" identified here is a specific concept of the tax law, which refers to the habitual residence in China due to the relationship between household registration, family, economic interests, etc. For example, after Russian A and Chinese B get married, both of them work in China, and their children are also studying and living in China, then they are considered to have a "residence" in China and are resident individuals. On the contrary, Russian A bought a house while working in China, but after the elimination of his work factor, he does not need to stay in China, so he does not belong to the "residence".

2, residence time standard A tax year in the territory of the cumulative residence of 183 days (that is, from January 1 to December 31 of the Gregorian calendar), belongs to the resident individual. It is worth noting that if the day of stay in China is less than 24 hours, it is not counted as the number of days of residence in China. For example, a foreign employee who works for a company in China from October 2020 needs to leave China to return to China for business expansion in 2021, but he is a resident individual because he has resided in China for 203 days.

Can foreigners enjoy special additional deduction policy?

According to the Notice of the General Administration of Taxation of the Ministry of Finance on the connection of Preferential Policies after the Amendment of the Individual Income Tax Law (Finance and Taxation [2018] No. 164), during the period from January 1, 2019 to December 31, 2021, foreign individuals who meet the personal conditions of residents can choose to enjoy special additional deductions of individual income tax. You can also choose to enjoy housing subsidies, language training fees, children's education fees and other subsidies tax exemption preferential policies (" Ministry of Finance Notice of the State Administration of Taxation on Several Policy Issues of Individual Income Tax (Finance and Taxation (1994) No. 20), Notice of the State Administration of Taxation on the Implementation of Individual Income Tax Exemption for Foreign Individuals in Obtaining Subsidies (1997) No. 54), and the State Administration of Taxation of the Ministry of Finance on Individual Income Tax Exemption for Foreign Individuals in Obtaining Housing subsidies in Hong Kong and Macao (Finance and Taxation [2004] No. 29)), but the above two types of policies may not be enjoyed at the same time. Once selected, the foreign individual cannot change it within one tax year. From January 1, 2022, foreign individuals no longer enjoy the tax exemption preferential policy of housing subsidies, language training fees, and children's education subsidies, and should enjoy special additional deductions in accordance with regulations.

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