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> Chinese Individual Tax Services

The prevailing legal basis of IIT system in China is formed by the Individual Income Tax Law and the Individual Income Tax Law Implementing Rules, the Law on the Administration of Tax Collection together with the tax circulars issued by various levels of the People's Republic of China tax administration..

New Mandatory Filing Law:  All tax payers whose income is more than RMB 120,000 or  equivalent must file their tax returns since 2007!

PRC IIT are imposed separately on various sources of income.  Each source of income has its own standard deduction and tax rates.  There are in total eleven sources of individual income that are subject to PRC IIT: 

  • Wages and salaries
  • Production and business income
  • Income derived from contracting for or leasing operations
  • Remuneration for personal services performed by independent contractors
  • Remuneration for manuscripts
  • Royalty income
  • Interests, dividends and bonuses
  • Income derived from leasing properties
  • Income derived from transfer of properties
  • Contingency income
  • Other income specified to be taxable by the finance department of the State Council

Income subject to tax includes income in the form of cash, income in-kind and income from marketable securities. 

 

PRC IIT is generally reported and paid on a withholding basis through withholding agents.  Any individual or unit which pays taxable income to a taxpayer is deemed to be an agent and is required to withhold and remit the tax payable from the taxpayer to the tax authorities.  The IIT is computed on a progress basis at the rate ranging from 5% to 45%.

 

A taxpayer through the agent is required to lodge the IIT return and pay taxes due to the competent authority within 7 days after the end of each month..  If the taxpayer or agent fails to file the return and pay taxes within the prescribed time limit, the tax authorities may impose a surcharge at 0.05% of the overdue payment per day.  In addition, one of more of the following levels of penalty may also be imposed: 

  • An additional fine of between RMB2,000 to 10,000.
  • A fine of 50% to five times the amount of overdue or underpaid tax
  •  In case of withholding agent, a charge of up to RMB50,000.
  • Criminal liabilities for serious offences

 We are pleased to provide you with the following services: 

  • Draft necessary documents for employment of expatriates. For example, employment contract, income letter, appointment letter, and so on.
  • Review and analyze salary package and advise on efficient structure of income package and provide opinion on tax position of expatriates. 
  •  Initial negotiation and agreeing with tax bureau on the basis of IIT for expatriates including assessment of tax basis.
  • Preparation and submission of monthly IIT returns and arrangement of the IIT payment for expatriates.
  • Negotiation with relevant tax authority on tax issues and disputes arisen.
  • Entrance and exit meeting with expatriates in regards to various aspects such as compensation, allowance, international policies, and so on.
  • Retaining service of IIT planning and consultation. Provide up-to-date information to expatriates on changes of Chinese tax regulations.
 
 

Global Executive Services Co.

Beijing ICP 11023364

京公安备11010502024300