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Human Resources and Payroll in China 2016-2017 (5th Edition) -
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Individual Income Tax for Foreign Employees in China
The time that a foreign employee has spent in China determines the extent of their tax liability in
the country, as detailed in the table below.
What is income sourced within China?
The following income types are deemed income sourced within China, regardless of who makes
the payment:
• Income from providing services (including employment) in China.
• Income from leasing property to a lessee for use in China.
• Income from transferring property located in China, such as buildings and land-use rights.
• Income from licensing the use of proprietary rights in China.
• Interest, dividend, and bonus income derived fromcompanies, enterprises, and other organizations
or individuals in China.
Determining an Individual’s Liability to PRC IIT
Taxpayer Status
Taxable Income
Living in China less than 90 days
(183 days if there is a tax treaty in place)
• Income sourced within China
• Income paid by an overseas employer (not borne by its Chinese
operation) is exempt
Living in China over 90 days
(183 days if there is a tax treaty) but less than one year
• Income sourced within China
• Income sourced outside of China is not subject to IIT, unless the
taxpayer is a director or senior manager of a Chinese domestic
enterprise
Between one and five years
• Income sourced within China
• Income sourced outside of China where the income is paid by a
Chinese enterprise or individual
Living in China over five years
• Income sourced within and outside China from the sixth year
onwards for every full year spent in China