01
Does parental support from overseas to China incur individual income tax?
Individual income tax does not apply to foreign parental support payments.
02
Can I waive my annual individual income tax refund?
It is your right to claim a refund, or you can waive it.
03
Is it necessary to declare and pay individual income tax in China for the wages and salaries or director's fees earned by a foreign individual who holds a director's or senior management position in an enterprise in China?
For individuals holding directorships, supervisory and senior management positions in domestic resident enterprises, regardless of whether they perform their positions in China or not, directors' fees, supervisory fees, wages and salaries, or other similar remuneration (including monthly bonuses and equity incentives) they earn are paid or borne by the domestic resident enterprises and are income sourced in China. All of them are required to declare and pay individual income tax in China.
Senior management positions include the head and deputy (general) managers of an enterprise, general managers of various departments, directors, and other positions similar to the management of a company.
04
Do non-resident individuals who have received taxable income and whose withholding agents have not withheld tax have to file a tax return before leaving China?
If a non-resident individual leaves China before June 30 of the following year (except for temporary departure), they should apply for a tax declaration before leaving.
05
How does one classify domestic income and foreign income for salary and wages earned by non-resident individuals (excluding senior management)?
Income derived from providing services within China due to employment, labor services, or fulfilling contracts is considered to be sourced from China.
An individual's income from wages and salaries attributable to a period of work in China is income from wages and salaries derived from China. The period of work in China is calculated based on the number of days the individual worked there. The number of days worked abroad is calculated by subtracting the number of days worked in China from the number of calendar days in the period. When an individual without a residence holds a position in both a domestic and a foreign organization or is employed only in a foreign organization and works both in China and foreign jurisdictions during the period, the amount of income from wages and salaries derived from China and foreign jurisdictions is calculated according to the ratio of the number of days worked in China and foreign jurisdictions to the number of days worked in the calendar year of the period to which the wages and salaries are attributable.
The number of days worked in China is not the same concept as the number of days of actual residence. The number of days worked in China includes the actual working days, as well as the number of days of sabbatical leave, personal leave, and training in China and abroad during the period of work. If a non-resident individual is not employed in an organization abroad, the number of days worked abroad is not counted, regardless of whether or not they stay abroad.
06
Are dividends distributed to foreign shareholders subject to withholding and payment of individual income tax?
Dividends obtained by foreign individuals from foreign-invested enterprises are temporarily exempted from individual income tax. Except for the above conditions for tax exemption, the income obtained by foreign individuals in other cases shall be subject to individual income tax according to the regulations, and the organization or individual paying the income shall be the withholding agent.
07
Does the tax withholding method need to be changed when a non-resident individual meets the conditions of a resident individual in a tax year?
An individual without a residence is presumed to be a non-resident. And if an individual meets the conditions of a resident individual by extending the number of days of residence, the method of withholding tax remains unchanged within a tax year. After the end of the year, the annual tax reconciliation return shall be filed in accordance with the relevant provisions for resident individuals. However, if the individual leaves the country in the current year and is not expected to re-enter it, he/she may choose to file the annual tax reconciliation return before leaving the country.
08
What are the circumstances under which a non-resident individual's income tax is self-declared?
In any of the following circumstances, non-resident individuals shall file a self-declaration: (1) obtaining taxable income from China without a withholding agent; (2) obtaining taxable income from China, but the withholding agent has failed to withhold and pay the tax; (3) obtaining salary and wages from two or more sources within China; and (4) any other circumstances stipulated by the State Council.
09
How do you calculate the credit limit for individual income tax when an individual receives foreign income in many countries and credits the tax paid?
The tax payable calculated on a taxpayer's income derived from outside China is the limit for a resident individual to offset the amount of income tax paid outside China on comprehensive income, income from business operation, and other income (hereinafter referred to as the credit limit).
Unless otherwise stipulated by the competent financial and tax departments of the State Council, the sum of the credit limit for comprehensive income, the credit limit for income from business operation, and the credit limit for other income derived from a country (region) outside China shall be the credit limit for the income derived from that country (region).
If the amount of individual income tax actually paid by a resident individual in a country (region) outside China is lower than the credit limit for income derived from that country (region) calculated in accordance with the preceding paragraph, he shall pay the difference in China; if it exceeds the credit limit for income derived from that country (region), the excess shall not be credited against the tax payable in the current taxable year but can be used as a credit in the subsequent taxable year. However, the excess shall not be deducted from the taxable amount of the current tax year, but can be deducted from the balance of the credit limit of the country (region) in the subsequent tax year. The maximum period for making up the credit shall not exceed five years.
10
Do I need to file the annual tax reconciliation return for the comprehensive income obtained in the year of emigration?
Where a taxpayer cancels the Chinese household registration due to emigration and obtains comprehensive income in the year of deregistration, he/she shall file an annual tax reconciliation return for comprehensive income for the year before deregistration and submit an Annual Individual Income Tax Return for Self-filing. Where the annual tax reconciliation return for comprehensive income for the previous year has not been filed, the taxpayer shall complete the filing when he/she file a tax return for deregistration.