Individual Income Tax

Introduction

China’s Individual Income Tax (IIT) Law has undergone many changes since it was first promulgated in 1980. Since this time, the Chinese tax authorities have implemented different measures to strengthen the collection and administration of IIT. For example, in recent years, the State Administration of Taxation (SAT) has issued several tax circulars to tighten its tax administration of high income earners, especially on income derived from investment and share transfers. In addition, the Chinese tax authorities have paid more attention to the tax compliance status of foreign inbound as well as Chinese outbound assignees.

How can Dezan Shira & Associates help?

The purpose of this brochure is to provide an overview of the different types of services that Dezan Shira can provide to its clients in relation to China’s IIT laws and regulations.

You should feel free to contact us if you:

• Are planning to set up an overseas office/company in China.
• Have queries regarding China’s IIT laws, Social Security requirements, immigration/visa regulations.
• Wish to bring employees into China or send local employees to locations outside of China.
• Want to provide your employees with tax efficient remuneration packages and incentives.
• Need assistance in formulating and/or updating your employee assignment policies.
• Are increasing or decreasing your employee numbers/head count.
• Are being audited by the China tax authorities.

Dezan Shira’s IIT services

Our IIT specialists can assist you with:

PRC IIT compliance
• Completion of monthly and annual IIT returns.
• Registrations with tax authorities.
• Assistance with tax audits and communication with the relevant tax authorities.

PRC social security
• Advise on China’s social security rules and local practices.
• Assist you in complying fully with China’s social security rules, including any of the latest developments.

Visa/immigration services
• Work permits and visa applications for foreign employees being brought to China to work full time.
• Visas for employees visiting China for business trips.

Health check and compliance
• Compliance reviews designed to identify risks and areas of non-compliance.
• Identify tax opportunities to improve overall efficiency.

Global mobility services
• Help you design a robust employee mobility plan under the PRC IIT laws and regulations.
• Structure employment arrangements to improve overall tax efficiency.
• Identification of any permanent establishment (PE) risks as well as putting procedures in place to mitigate these risks, especially for frequent travellers to China.

Why Dezan Shira & Associates

Dezan Shira’s tax practice specifically focuses on providing advice to foreign companies in relation to their investments and business activities in China. Dezan Shira has a dedicated PRC tax team which is highly experienced and specialised in all areas of PRC tax, including IIT. Our tax professionals have a strong working relationship with the China tax authorities on all levels and are able to assist you with multiple aspects associated with your company’s IIT affairs.

The abovementioned services are intended to highlight the range of services we currently provide our clients. We would be pleased to have a conversation with you to hear about your particular needs and requirements. From there, we can prepare a precise scope of work and fee proposal taking these into account.

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