Resident and Non-Resident Status

Foreign individuals are categorized as either resident taxpayers or non- resident taxpayers based on whether they have a residence in China and the length of stay in China.

Resident taxpayers refer to foreigners who have a residence in China or who do not have a residence but reside in China for over 183 days in a tax year. Resident individuals must pay individual income tax on income earned both within and outside China, in accordance with the Individual Income Tax Law of the People's Republic of China and relevant regulations.

The tax year is from January 1 to December 31 of the Gregorian calendar.

* Comprehensive income settlement & declaration

Please visit web site：https ://etax.chinatax. gov.cn , or complete the relevant procedures by downloading the Personal Income Tax app from mobile app stores.

* Inquiry on the Entitlement to Tax Treaty Benefits

Please visit website https: //www.chinatax.gov.cn/chinatax/n810341/n810770/com mon_list_ssty. html

* Issuance of tax records

Please visit website ：https: // etax.chinatax.gov.cn

*Policies Related to Tax Incentives for Foreign Talent

Under the current tax law provisions, the preferential tax policies for foreign individuals mainly include the following items:

I．Staff Members Working in China

Staff members sent by aid-providing countries to China to work exclusively on construction projects that are provided to China as gratuitous aid may be exempted from individual income tax on their salaries and living allowances, regardless of whether such payments are made by Chinese or foreign parties.

II．Foreign Experts

Foreign experts who meet any of the following conditions may be exempted from individual income tax on their wages and salaries:

i. Foreign experts directly dispatched to work in China by the World Bank under special World Bank loan agreements;

ii. Experts directly dispatched to work in China by United Nations organizations;

iii. Experts coming to China to work on United Nations aid projects;

iv. Experts sent by aid-providing countries to work exclusively on their countries' gratuitous aid projects in China;

v. Cultural and educational experts coming to China for a period not exceeding two years under cultural exchange programs signed by the governments of the two countries, whose wages and salaries are borne by their home countries;

vi. Cultural and educational experts coming to China for a period not exceeding two years under international exchange programs of Chinese colleges and universities, whose wages and salaries are borne by their home countries;

vii. Experts coming to China to work under non-governmental scientific research agreements, whose wages and salaries are borne by government agencies of their home countries.

III. Income from Overseas Sources

Individuals without domicile in China who have resided in China for an aggregate of 183 days per year for fewer than six consecutive years may, upon filing the record with the competent tax authority, be exempted from individual income tax on the income derived from sources outside China and paid by overseas entities or individuals.

If such individuals take a single trip out of China for more than 30 days in any year when they have resided in China for an aggregate of 183 days, the consecutive period of years in which they have resided in China for an aggregate of 183 days per year shall be recalculated.

Individuals without domicile in China who have resided in China for an aggregate of no more than 90 days in a single tax year may be exempted from individual income tax on the portion of their income derived from sources within China that is paid by an overseas employer and not borne by any establishment or place of business of such employer in China.

IV ．Eight Types of Subsidies Including Housing Subsidies for Foreign Individuals

i. For the following income obtained by foreign individuals, individual income tax shall be temporarily exempted when they file tax returns or when their withholding agents withhold and remit individual income tax, provided that they submit the relevant valid vouchers and supporting documents in accordance with regulations

(i). Housing subsidies, food allowances, relocation expenses, and laundry expenses obtained by foreign individuals in non-cash form or on a reimbursement basis.

(ii). Domestic and overseas business travel allowances obtained by foreign individuals in accordance with reasonable standards.

(iii ). Reasonable portions of home leave expenses, language training expenses, and children's education expenses obtained by foreign individuals.

The home leave expenses eligible for individual income tax exemption are limited to the transportation costs incurred by foreign individuals traveling between their place of employment in China and their family's place of residence (including the place of residence of their spouse or parents), with the number of such trips not exceeding twice a year.

Foreign individuals employed by enterprises in China (excluding Hong Kong and Macao resident individuals) who reside in Hong Kong or Macao for family or other reasons and commute between the Chinese mainland and Hong Kong or Macao on a daily basis for work may, upon providing valid supporting documents, be exempted from individual income tax on the non-cash or reimbursement-based subsidies (such as housing, food, laundry, and relocation subsidies) provided by the employing enterprise in China (including its affiliated enterprises) for their expenses in Hong Kong or Macao, in accordance with the relevant provisions.

For the subsidies received by such foreign individuals for language training and children's education expenses incurred in Hong Kong or Macao, the reasonable portion confirmed by the competent tax authority upon submission of valid expense vouchers and other relevant materials may be exempted from individual income tax in accordance with the relevant provisions.

ii. During the period from January 1, 2019 to December 31, 2027, foreign individuals who meet the criteria for resident individuals may choose to enjoy the special additional deductions for individual income tax or the preferential tax - exemption policies on allowances and subsidies such as housing subsidies, language training fees, and children's education expenses. However, they shall not enjoy both types of preferences simultaneously. Once a foreign individual makes a choice, it shall not be changed within a tax year.

iii. Starting from January 1, 2022, foreign individuals shall no longer be eligible for the preferential tax - exemption policies on allowances and subsidies including housing subsidies, language training fees, and children's education expenses. Instead, they shall be entitled to the special additional deductions for individual income tax in accordance with the relevant provisions.

V. Wages and Salaries Earned by International Students

Living allowances and scholarships received by international students coming to China do not fall within the scope of wages and salaries, and thus are not subject to individual income tax.

VI. Investment Incentives

i. Dividends and bonuses obtained by foreign individuals from foreign-invested enterprises shall be temporarily exempted from individual income tax.

ii. Starting from November 17, 2014, the gains from the transfer of A-shares listed on the Shanghai Stock Exchange (SSE) obtained by individual investors in the Hong Kong market shall be temporarily exempted from individual income tax.

iii. . With respect to the dividends and bonuses obtained by individual investors in the Hong Kong market from A-shares listed on the SSE, before Hong Kong Securities Clearing Company Limited is able to provide China Securities Depository and Clearing Corporation Limited with detailed data such as investors' identities and shareholding periods, the differentiated tax policy based on shareholding periods shall be temporarily not implemented. Listed companies shall withhold income tax at a tax rate of 10% and complete withholding declarations with their competent tax authorities.

For Hong Kong investors who are tax residents of other countries/regions, and whose resident countries/regions have signed tax treaties with China that stipulate a lower tax rate on dividends and bonuses than 10%, the enterprises or individuals may file an application for enjoying tax treaty benefits with the competent tax authorities of the listed companies on their own or through withholding agents. After examination and verification by the competent tax authorities, a tax refund shall be granted for the difference between the tax already withheld and the tax payable calculated in accordance with the tax rate specified in the tax treaty.

Starting from December 18, 2015, the gains from the transfer of Mainland fund units obtained by individual investors in the Hong Kong market through the Mainland - Hong Kong Mutual Recognition of Funds are temporarily exempted from individual income tax.

With respect to the income distributed to individual investors in the Hong Kong market from Mainland funds via the Mutual Recognition of Funds: When Mainland listed companies distribute dividends and bonuses to such Mainland funds, they shall withhold income tax at a rate of 10% on behalf of Hong Kong market investors. When bond - issuing enterprises distribute interest to such Mainland funds, they shall withhold income tax at a rate of 7% on behalf of Hong Kong market investors. In both cases, the Mainland listed companies or bond - issuing enterprises shall complete the withholding declaration with their competent tax authorities. No further withholding of income tax shall be required when the Mainland funds distribute income to investors.

Starting from December 5, 2016, the gains from the transfer of A-shares listed on the Shenzhen Stock Exchange (SZSE) obtained by individual investors in the Hong Kong market shall be temporarily exempted from individual income tax.

With respect to the dividends and bonuses obtained by individual investors in the Hong Kong market from A-shares listed on the SZSE, before Hong Kong Securities Clearing Company Limited is able to provide China Securities Depository and Clearing Corporation Limited with detailed data such as investors' identities and shareholding periods, the differentiated tax policy based on shareholding periods shall be temporarily not implemented. Listed companies shall withhold income tax at a tax rate of 10% and complete the withholding declaration with their competent tax authorities. For Hong Kong investors who are tax residents of other countries/regions and whose resident countries/regions have signed tax treaties with China that stipulate a lower tax rate on dividends and bonuses than 10%, the enterprises or individuals may file an application for a tax refund of overpaid taxes to enjoy tax treaty benefits with the competent tax authorities of the listed companies on their own or through withholding agents. After verification by the competent tax authorities, a tax refund shall be granted for the difference between the tax already withheld and the tax payable calculated in accordance with the tax rate specified in the tax treaty for those who meet the tax refund requirements.

VII. Overseas Chinese 's Acquisition of Foreign Exchange

Overseas Chinese remittances to the Chinese mainland for supporting their families, foreign exchange remitted from overseas to claim overseas inherited estates, and foreign exchange remitted from overseas to recover unfrozen funds in the United States shall be exempted from individual income tax.

VIII. Diplomatic Missions and Consulates Stationed in China

Income derived by diplomatic agents, consular officers, and other personnel of embassies and consulates of various countries stationed in China, which is eligible for tax exemption in accordance with the provisions of relevant laws, shall be exempted from individual income tax.

The term "income derived by diplomatic agents, consular officers, and other personnel of embassies and consulates of various countries stationed in China that is eligible for tax exemption in accordance with the provisions of relevant laws" as mentioned in Item 8, Paragraph 1, Article 4 of the Individual Income Tax Law refers to the income that is exempted from tax in accordance with the provisions of the Regulations of the People's Republic of China on Diplomatic Privileges and Immunities and the Regulations of the People 's Republic of China on Consular Privileges and Immunities.

IX. Enjoyment of Tax Treaty Benefits

Income that is stipulated as tax-exempt under the international conventions to which the Chinese Government is a party or the agreements signed by the Chinese Government shall be exempted from individual income tax.

Individuals who are identified as tax residents of the contracting counterpart in accordance with the resident provisions of the double taxation avoidance agreements signed by the Chinese Government, as well as the double taxation avoidance arrangements signed between the Chinese mainland and Hong Kong and Macao (hereinafter referred to as tax treaties), may enjoy tax treaty benefits in accordance with the provisions of the tax treaties and the relevant regulations issued by the Ministry of Finance and the State Taxation Administration, or may choose not to enjoy such benefits when calculating and paying taxes.

(Note: For the signing status and contents of the relevant tax treaties and international transport agreements, please refer to the "Tax Treaties" special section on the official website of the State Taxation Administration.)