According to the Announcement of the Ministry of Finance and the State Administration of Taxation on the Continuation of the Implementation of Individual Income Tax Policies on Allowances and Subsidies for Foreign Individuals jointly issued by the Ministry of Finance and the State Administration of Taxation, qualified foreign individuals can choose to continue to enjoy tax-exempted allowances, such as housing allowances, language training allowances, and children's education allowances, etc. What tax incentives are there for foreigners, in addition to the above welfare policies that they can enjoy?

1.China's personal tax policy for expatriates

Under any of the following circumstances, the taxpayer shall pay the tax according to the law:

(1)The final settlement of the comprehensive income shall be handled;

(2)There is no withholding agent for the taxable income;

(3)The withholding agent does not withhold the tax from the taxable income;

(4) Overseas income is obtained;

(5)Cancellation of Chinese household registration due to overseas migration;

(6) Income of non-resident individuals from two or more parts of China.

2.Foreign individual subsidies, allowance and tax exemption

The following subsidies obtained by foreign individuals (including Hong Kong, Macao and Taiwan compatriots) are temporarily exempted from individual income tax:

(1)Housing subsidies, food subsidies, relocation fees and laundry fees obtained in the form of non-cash or reimbursement;

(2)The relocation fee obtained in the form of working in or leaving in China, excluding the monthly or regular fees paid by the employer to foreign employees in the name of the relocation fee;

(2)Subsidies for domestic and overseas business trips obtained according to reasonable standards;

(4)The part of the family visit fee, within a reasonable amount, shall only refer to the transportation between the place of employment and his / her family (including the residence of the spouse or parents) and not more than twice a year;

(5)The portion of the language training fee and children's education fee subsidy obtained from receiving language training fee and children's education in China, and within a reasonable amount;

(6)Special circumstances of foreigners living in Hong Kong and Macao for family reasons enjoying six subsidies.

Since January 1,2004, foreign individuals employed by enterprises in our country individual (not including Hong Kong and Macao residents), because of family reasons living in Hong Kong, Macao, every working day between the mainland and Hong Kong, Macao and other areas, the domestic enterprises (including its associated enterprises) in Hong Kong or Macao housing, food, laundry, relocation and other non-cash or in the form of subsidies, who can provide valid vouchers, confirmed by the competent tax authorities, can be exempted from individual income tax. For the aforementioned foreign individuals for language training and children's education in Hong Kong or Macao, they may be exempted from individual income tax after examination and verification by the competent tax authorities.

From January 1,2019 to December 31,2021, foreign individuals who meet the individual conditions of residents can choose to enjoy special additional deductions of individual income tax, or enjoy preferential subsidies, such as housing subsidies, language training fees, and education fees for children, but not at the same time. Once selected, foreign individuals shall not change within one tax year. Starting from January 1,2022, foreign individuals will no longer enjoy the tax exemption policy of housing subsidy, language training fee and children's education subsidy, and should enjoy special additional deductions according to the regulations.

3.Foreign dispatch unit pays a lump-sum payment

Foreign staff members in China shall be paid by foreign dispatched units, including:

Individual wages, public expenses (postal and telecommunications expenses, office expenses, advertising expenses, necessary communication expenses for business contacts), living allowance expenses (housing expenses, travel expenses), where the above income can be clearly divided, individual income tax may be levied only on the part of wages and salaries in accordance with the provisions.

4.Dividend tax benefits

Individual income tax on dividends and dividends obtained from foreign individuals (including compatriots from Hong Kong, Macao and Taiwan) from foreign-invested enterprises.

If one of the following conditions, foreign experts (including Hong Kong, Macao and Taiwan compatriots) can be exempted from wages and salaries from individual income tax:

(1) Foreign experts directly assigned by the World Bank to work in China under the World Bank Special Loan Agreement;

(2)Experts directly sent to the United Nations organization to work in China;

(3)Experts working in China for UN assistance projects;

(4)Experts sent by aid countries to China to work on free assistance projects for the country;

(5)Salary and salaries income of cultural and educational experts who have worked in China within two years according to the cultural exchange project signed by the two governments shall be borne by the country;

(6)Salary and salaries income of cultural and educational experts who have worked in China for less than two years according to the international exchange program of Chinese colleges and universities, shall be borne by the country;

(7)The wages and salaries of experts working in China through private research agreements shall be borne by the government agencies of the country.

6. Income from stock transfer is exempt from tax

(1)Since December 18,2015, individual income tax is temporarily exempted from the income from the transfer price difference obtained by individual investors in the Hong Kong market through the trading of mainland fund shares through mutual recognition of funds.

(2)Since December 5,2016, individual income tax is temporarily exempted from the transfer difference obtained by individual investors in the A-shares listed on the Shenzhen Stock Exchange.

All articles reproduced on this website are copyrighted by the original author, and the contents are for study and reference only, not for commercial use, and some of the pictures are originated from the Internet. If in the process of forwarding involved in copyright issues, please contact us in a timely manner, we will be dealt with appropriately as soon as possible.