Personal Allowances - Foreign Nationals Working in China-Company Formation_Trademark Registration_Tax Service - Hong Kong CPA

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Personal Allowances - Foreign Nationals Working in China

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Personal Allowances - Foreign Nationals Working in China

The Individual Income Tax Law of the PRC allows deductions from certain categories of income in computing the individual income tax of foreign resident taxpayers, as follows.

No.	Taxable income	Deduction
1	Income from wages and salaries	RMB 5,000 per month
2	Income from compensation for personal services, author's remuneration, royalties, or the lease of property:
3	If the expenses amount to a single payment of not more than RMB 4,000	RMB 800
4	If the expenses amount to a single payment more than RMB 4,000	20%

Notes:

For income from compensation for personal services, author's remuneration, royalties or the lease of property, the economic substance of a transaction will determine whether income received in several instalments of not more than RMB 4,000 each (and thus eligible for multiple RMB 800 standard deductions) will be treated as a lump sum. If the instalment payments are the result of a single economic transaction, they will be treated as a lump sum.

Actual expenses are not deductible against compensation for personal services, author's remuneration, and royalties. A limited deduction is available for expenses incurred in connection with the lease of property.
Interest, dividends, bonuses on investments, contingent income, and other kinds of income are taxed on the gross amounts received, without deductions.

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Personal Allowances - Foreign Nationals Working in China

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