China poised to end the exemption of individual income tax on dividends received by foreign individual investors

From early nineteen nineties, China has kept the favourable tax treatment for foreign individual investors pursuant to which dividends received by such individual foreign investors is exempted from paying China's individual income tax, a strong incentive to encourage foreigner to invest in China.

On February 3, China cabinet announced its plan for reforming…

Need I pay the individual income tax in China?

An American person had an issue regarding individual income tax with his employer. He approached me for advice on that.

It is a simple matter. The guy is hired by a newly established joint venture in HK and actually he is a minority partner in the joint venture also. The JV has business operation in China. The guy was sent to China for a few meetings for which he spent…

Do I enjoy the tax credit benefit under China-USA income tax treaty?

Recently, an American expat working in China approached me for advice about his situation where he was ordered by local tax authority to pay individual income tax that is inadvertently evaded in the past five years.

The USA expat was originally dispatched by American parent company to offer engineering support to Chinese plant. He was however paid by the parent…

Individual Income Tax Liabilities for Expatriates in China

For foreigners lured into China labor market, there are many things for them to ponder over before heading to China soil. One of the critical things that need to be clearly addressed is the tax implication of working in China, namely, whether you need to pay individual income tax in China, and how and how much you need to pay China individual income tax.

For those…

Q&A relating to Individual Income Tax for Foreign Individuals(外国人个人所得税)

I. What kinds of foreign individuals shall pay Individual Income Tax ("IIT") in China?

Pursuant to the PRC IIT Law and its Detailed Implementation Rules:

  1.Foreigners, residents of the regions of Hong Kong, Macau and Taiwan (hereinafter referred to as "Foreign Individuals") who derive income from working or employment with enterprises…