China, People's Republic of

Individual - Other tax credits and incentives

Last reviewed - 15 January 2024

Dividend income is generally taxed at 20% unless otherwise provided for in the applicable income tax treaty. Dividend income derived from shares traded on the Shanghai, Shenzhen, and Beijing Stock Exchanges is entitled to 50% or 100% tax reduction, depending on the length of holding. 

Capital gains from transfer of shares traded on the Shanghai, Shenzhen, and Beijing Stock Exchanges are generally exempt from IIT. 

Interest on government bonds and finance bonds issued by the Chinese Government, as well as bank deposit interest income, is currently exempt from IIT.

Income of diplomatic representatives, consuls, and other personnel of foreign embassies and consulates is also exempt from IIT.

China's domestic law states that those foreign individuals who stay in China for no more than 90 days within a tax year may be exempted from IIT on their China-sourced employment income provided such income is paid or borne by a non-China entity (see the Residence section for more information).

A tax incentive is available for eligible talents deriving comprehensive income (or employment income, remuneration for labour services, author's remuneration, and royalties in case of non-resident taxpayers) or business income from specific regions, such as the Hainan Free Trade Port (from 1 January 2020 to 31 December 2024), the nine cities in the Guangdong-Hong Kong-Macao Greater Bay Area (from 1 January 2019 to 31 December 2027), and the Guangdong-Macao In-Depth Cooperation Zone in Hengqin (from 1 January 2021 to 31 December 2025). The effective tax rate on the above-mentioned income is capped at 15%, and an IIT refund or rebate claim is available for any excess IIT paid or withheld.