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- Human Resources and Payroll in China 2016-2017 (5th Edition)
Who needs to make an annual declaration of their income?
The annual income declaration should be made no later than March by anyone who has income in
China in excess of RMB 120,000 during the financial year (January 1 toDecember 31).This requirement
was introduced by the government to ensure that individuals earning significant income fromChina
take personal responsibility for the amount of tax that they pay.
This income does not all have to be derived from salary; it can also come from other sources such
as commission, service fee, or interests. Foreigners that have stayed in China for less than 275 days
during the calendar year are not required to make this declaration, even if the amount of personal
income they have received from China in one form or another exceeds this amount.
The most important information on the form is as follows:
• Name of individual and employer.
• Income from wages, taxable income, tax paid and tax still owed.
• List of other non-salary income.
• Signature of employee submitting information under the section clearly stating that the
information is complete and accurate.
Since the details on this formare not limited to salary income and also include other forms of income,
the responsibility for submission lies with the individual rather than the employer. At the end of the
year, the employer should inform the employee of the total amount of gross income paid by the
company and the total amount of tax paid on behalf of the individual over the course of the year. If
gross income, added to any other income earned from other sources during the year, exceeds RMB
120,000, the individual should fill out and submit a declaration.
As mentioned above, the obligation to submit such a form extends to foreigners working in China.
In situations where the salary details of the foreign employee cannot be disclosed to any local staff
member, companies will often appoint a third-party agent to assist the foreign employee to make
the declaration.