China, People's Republic of
China-domiciled individuals and non-China-domiciled individuals who reside in China for 183 days or more in a tax year are considered residents for IIT purpose. Residents in general are subject to IIT on their worldwide income.
Non-China-domiciled individuals who reside in China for less than 183 days in a tax year are considered non-residents for IIT purpose. Non-residents in general are subject to IIT on their China-source income only.
China-domiciled individuals are those who habitually reside in China because of their legal residency status, family, or economic ties in China.
Chinese nationals, excluding residents of Hong Kong, Macau, and Taiwan who are normally considered as non-China-domiciled individuals, are generally considered to have a domicile in China.
Foreign individuals and residents of Hong Kong, Macau, and Taiwan are generally taxed in accordance with their physical presence in China, as follows:
- Foreign individuals who reside in China for less than 183 days will be taxed only on their China-source income (see the Income determination section for more information on China-source income).
- Foreign individuals who reside in China for 183 days or more in a tax year but not more than six consecutive years will be subject to tax on both their China-source income and their foreign-source income. However, as a concession, foreign-source income is taxed only to the extent of income paid and/or borne by a China entity or individual.
- Foreign individuals who reside in China for 183 days or more per year for over six consecutive years will be subject to IIT on their worldwide income from the seventh consecutive year onward if they reside in China for 183 days or more during the year. The 'six-year' count is reset if the foreign individual spends more than 30 consecutive days outside of China during any tax year.
- Foreign individuals who travel to China and derive income from an overseas employer with no permanent establishment in China will be tax exempt if they do not physically stay in China cumulatively for more than 90 days in a calendar year. If the individual is a tax resident of a country/region that has concluded a tax treaty/arrangement with China, the 90-day threshold is extended to 183 days during a calendar year or any 12 consecutive months, depending on the applicable tax treaty/arrangement.
The following categories of income, regardless of whether the payments are made within China or not, are considered China-source income:
- Income derived from employment or contracted labour services performed within the territory of China.
- Rental income in relation to property used within the territory of China.
- Income derived from the transfer of real property located within China or other property transfer transactions incurred within the territory of China.
- Income derived through the grant of various franchises to be used within the territory of China.
- Interest and dividend income paid by companies, enterprises, other organisations, or resident individuals within the territory of China.
- Author's remuneration paid or borne by companies, enterprises, or other organisations within the territory of China.