Tuesday, February 15, 2011

China Expatriate Annual Income Tax Reporting for 2010

Individuals residing in China are subject to individual income tax (IIT). Expatriates who are employed in China are liable for IIT from either the first day they arrive in China or their first official working day. Be aware that the China Tax Bureau may take the arrival date as the trigger point for tax liabilities. They must file a monthly tax return as well as an additional annual return. Penalties for late filing can be up to five times the amount that was due.

Tax liabilities of foreigners generally depend on the period of time an individual spends in China and the source of income. Individuals who spend less than 90 days in one calendar year in China are exempt from IIT if the employment income is paid by an overseas entity.

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