Do the current tax exemption benefits for foreigners still exist under China’s new IIT Law?

Q&As

Yes.

We believe that the current non-tax fringe benefits for expatriates will be partly kept. The draft Measures on Additional Itemized Deductions of Individual Income Tax stated that foreign individuals can choose to adopt the special additional deduction policy or continue to enjoy the current tax incentives on children's education fees, language training fees, and housing subsidies. Some other subsidies, such as: meal allowance, home trips fees, laundry fees, etc. that are not mentioned in the Draft probably will be abolished.

Simply put, expatriates will retain some of the tax-exempt benefits they currently partly enjoy; however, they will not be able to claim exemptions for items such as housing rent, children’s education, or language training while also claiming a deduction for the same item. The details will have to be further confirmed with local tax authorities later on.

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