The definition of Tax Resident

 in China

A tax resident is subject to tax on worldwide income. The definition of tax resident in China has changed. Before the amendment, to become a tax resident, you have to stay 365 days a year in China, now, only 183 days per year, you are subject to the Individual Income Tax (IIT).

纳税居民要按世界范围内的收入征税。我国税收居民的定义发生了变化。在修订之前，要成为税务居民，你必须一年在中国停留365天，现在，你一年只有183天，你需要缴纳个人所得税(IIT)。

The 183-day rule is used to determine whether a person is a tax resident or a non-tax resident.

183天规则用于确定一个人是纳税居民还是非纳税居民。

Article 4 (the Implementation Regulations of the new IIT Law) provides that worldwide incomes of an individual who is not domiciled in China but reside more than 183 days per year and consecutively for a period of not exceeding 6 years (previously 5 years) is exempt from the IIT, under the condition that such income is neither sourced in China nor paid by a Chinese entity. If the non-PRC domiciled individual leaves China for a duration exceeding 30 days at any year in which his residence in China is more than 183 days, the counting of number of years, restarts.

第4条(新“个人所得税法实施条例”)规定，非中国户籍但每年居住超过183天并连续居住不超过6年(以前为5年)的个人的全球收入，只要该收入既不是来自中国，也不是由中国实体支付的，则免征个人所得税。非中华人民共和国户籍个人在中国居留超过183天的年份，离境时间超过30日的，重新开始计算年限。

▍Tax exemptions | 免税优惠

When the employees are resident in a PRC-treaty country and stays in China for fewer than 183 days in a calendar year, he will not be subject to income tax, only if the salary is not paid or borne by an source inside the PRC and or by and entity inside the PRC. From a non-treaty country, the time period is shortened to 90 days. There are more than 110 countries formed treaty with the China tax bureau, detailed information can be found in the State Taxation Administration.

当雇员居住在中华人民共和国签约国，并且在一个日历年度内在中国停留少于183天时，只有在工资不是由中国境内的来源和/或中国境内的实体支付或承担的情况下，他才不需要缴纳所得税。从非条约国家，时间缩短到90天。目前已有110多个国家与中国税务局签订了条约，详细信息可在国家税务总局查询

▍Tax deductions | 税收减免

Expatriates working in China use to take a number of deductions in computing taxable income while resident employees were not. Under the new law, all employees will be allowed deductions for child education expenses, further self-education, major illness health care costs, interests on housing loans and housing rent. Meanwhile, certain deductions were canceled for foreign workers, such as laundry expenses, meal allowances, and home flights.

在中国工作的外籍人士过去在计算应税收入时会有一些扣减，而常驻员工则不会。根据新法律，所有员工将被允许扣除子女教育费用、进一步自我教育、大病医疗费用、住房贷款利息和住房租金。与此同时，取消了对外籍工人的某些扣除，如洗衣费、餐费和回家的机票。

According to the latest notice addressing the subsidy and deduction for foreign residents, it is optional to choose either the housing allowance, language training and children’s education allowance, or the tax deduction, but one may not enjoy both. Once chosen, it cannot be changed within one taxable year. Since January 1st 2022, expatiates can no longer enjoy tax exempt on benefiting allowances specially for foreigners and shall comply with the tax deduction policy as residents.

根据最新的关于外国居民补贴和扣除的通知，可以选择住房津贴、语言培训和子女教育津贴，也可以选择税收减免，但不能同时享受两者。一经选择，在一个纳税年度内不能变更。自2022年1月1日起，阐述不能再享受外国人特惠津贴免税，应遵守居民减税政策。

▍Bracket and Rate Change | 税收档次变动

The amount of income not subject to tax has raised to 5000CNY per month. And tax brackets are raised for employees making up to 35000CNY.

免税收入提高到每月5000元。收入在35000元人民币以下的员工的税级也提高了。

See chart below

Monthly taxable income (CNY)		Tax rate as a percentage of (%)	Quick Calculation for the deduction (CNY)
1 to 1,500	0 to 1,455	3	0
1,501 to 4,500	Over 1,455 to 4,155	10	105
4,501 to 9,000	Over 4,155 to 7,755	20	555
9,001 to 35,000	Over 7,755 to 27,255	25	1005
35,001 to 55,000	Over 27,255 to 41,255	30	2755
55,001 to 80,000	Over 41,255 to 57,505	35	5505
80,000	Over 57,505	45	13505

It is important to understand that the taxable income includes everything received by an employee in virtue of his/her labor, including commissions and bonus and other form of income.

重要的是要理解，应税收入包括雇员凭借其劳动获得的一切，包括佣金、奖金和其他形式的收入。

In the end, let’s have a look at a short case study to better understand the IIT

最后，让我们来看一个简短的案例研究，以更好地理解个人所得税

▍Case study | 案例研究

Tom is an employee of an international companies based in New York, USA. His monthly income is $10,000 allowance and expenses included when he is transferred to its Ningbo office working as an engineer. His remuneration is paid $6,000 by New York office and $4,000 equivalent of RMB by the Ningbo office. How would Tom pay his income tax?

汤姆是一家总部设在美国纽约的跨国公司的雇员。他的月收入是1万美元，其中包括他被调到宁波办事处做工程师时的津贴和费用。纽约办事处支付他6000美元，宁波办事处支付相当于人民币4000美元。汤姆将如何缴纳他的所得税？

First of all, $4,000 equivalent of RMB is taxable as it is sourced in China. The rest of $6,000 is debatable under two scenarios based on whether Tom can be defined as a tax resident in China or not.

首先，相当于4000美元的人民币是要纳税的，因为它来自中国。其余的6,000美元在两种情况下都有争议，这两种情况基于汤姆是否可以被定义为在中国的纳税居民。

? Tax Resident Scenario | 税收居民场景

Tom is continually absent from China for 30 days or less, or his is absent for accumulatively 90 days or less in a calendar year.

汤姆连续离开中国不超过30天，或者他的父亲在一个历年中累计缺席90天或更少。

? the whole amount of $6,000 received from New York office is taxable.

从纽约办事处收到的全部6,000美元是要纳税的。

?  Non-Tax Resident Scenario | 非税居民场景

Tom is absence from China for more than 30 days continuously or accumulatively 90 days in a calendar year.

汤姆在一个历年中连续或累计离境超过30天或累计90天。

?If Tom works for fewer than 183 days in one year in China, $6,000 will be exempted.

如果汤姆在中国一年的工作时间少于183天，将免交6000美元。

?If Tom works for 183 days and more in one year in China, the $6,000 converted in RMB will be liable to tax in proportion to the number of the days he stays in China.

如果汤姆在中国工作一年超过183天，折算成人民币的6000美元将按照他在中国停留的天数按比例纳税。

Taxation can be complicated with details and legal terms that cannot be explained completely in one short article. We hope this highlight on the latest IIT policy give you basic idea of individual income tax in China and you can understand why and how you may or may not be taxed.

税收可能是复杂的，细节和法律术语不能在一篇短文中完全解释。我们希望这一最新个人所得税政策的亮点能让您对中国的个人所得税有基本的了解，并能让您了解为什么以及如何征税。

It has always been a complex task to calculate tax for expatiates, correctly understand the latest policy is vital to maximize income within legal boundary. Reindeer Station provides legal consultation on cooperate taxation and individual taxation. If you have any doubts about your tax situation in China, don’t hesitate to contact us, let’s bring you to a new vision.

税收的计算历来是一项复杂的任务，对此进行阐述，正确理解最新的税收政策对于在法定范围内实现收入最大化至关重要。灵达商务（涉外服务）有限公司提供合作税收和个人税收方面的法律咨询。如果您对您在中国的税务情况有任何疑问，请不要犹豫与我们联系，让我们带您进入一个新的愿景。