Hi everbody,

I may be stationed in China shortly and as I will be residing out of my country for more than 183 days I will be paying China tax. As the 'gross' salary offered is lower than my previous position I need to calculate my 'net-income' before accepting the position.


Quick questions regarding china tax:

1. Can the tax sum in China be LEGALLY reduced or avoided? If so... how?

2. If tax is to be paid to the Chinese govt...how is this practically done? Do I or the company transfer the sum to the local IRS account

3. Does one convert the salary into RMB before calculating the tax sum? If so do I use an average rate for the conversion or is there a prespecified fix rate stated by the local IRS?

I have plenty of other questions, but if you could come with your feedback concerning the above I will greatly appreciate this.

Much obliged...


frontline.

Hi,


Can anyone advise how I could pay China income taxes (yearly) directly to the gov't?

Where and who do I pay this to?

There reason I am asking is if my company does not deduct my china taxes from my income, then I will need to.

Please let me know if anyone has an answer.

Thanks,

Where are you from?

The US Government allows you to live up to 360 days in another country without paying State or Federal Income Taxes. Your accountant can give your company a form to sign that releases them from withholding these payments to the government.

After the 360 days are up, the US gov says you do not have to pay income taxes on anything USD$85,000 or less. If you make more than that, have your company pay a "shadow salary" to your Chinese bank account or a small percentage of your real salary and have the rest collected in a US bank account.

Edited to add that in the US during the first 360 days abroad your housing, transportation, living expenses, etc. can be expensed in EXACTLY the same as say your company was having you move from say, NYC to Gary, Indiana for 6 months. No difference b/t a domestic or international move in the first 360 days.

DezanShiraUpdate wrote:However, if you are based in China for more than 183 days (six months) in any 12 month period you must declare your salary to the Chinese Government and pay tax here. China and the US have a double tax treaty so you may claim any excess taxes back, but you MUST register here in China or you are staying illegally.

We should point out that the 183 day ruling only applies for nationals of a country that has a double tax treaty with China. (Most, actually). If you are a national of a country that does not have such status then the number of days you are permitted to be in China without declaring taxable income is reduced to 90 in any 365 day period.

Is the 183-day rule as simple as that?

What happens if I am an employee of an Australian company coming here for less than 183 days a year on a business visa to do work for a sister company here in Shanghai and part of my salary (and expenses) is recharged to the Shanghai operation?

Are you saying that it has no impact on my individual income tax liability whether or not my salary expense is partially recharged to the Shanghai operation?

Also, what you say on your site seems to conflict with what you said above. http://www.oooooooo/china_individual_income_tax.htm

Staff Based Elsewhere but Occasionally Visiting Their Companies China Entity
If you are physically employed outside China but sometimes visit on business trips every now and then, you can be in China for up to 90 days in any twelve month period and enjoy the tax free policy granted to foreigners. But if you intend to, or have been in China for longer than this, you need to file your IIT based upon the earnings you obtained during the whole period.

Please clarify. Thanks.

lancesidecar wrote:Where are you from?
The US Government allows you to live up to 360 days in another country without paying State or Federal Income Taxes. Your accountant can give your company a form to sign that releases them from withholding these payments to the government.

After the 360 days are up, the US gov says you do not have to pay income taxes on anything USD$85,000 or less.

Have any reference links from which you pulled these numbers, IRS or other?

If you make more than that, have your company pay a "shadow salary" to your Chinese bank account or a small percentage of your real salary and have the rest collected in a US bank account.

This is an illicit evasion you're suggesting rather than a loophole exploitation, yes?

[quote="DezanShiraUpdate"]Actually the cutting there is NOT all what the site says. Did it fully download properly before you cut and pasted that ?/[quote]

I just visited the link again and it has changed! I visited that page twice and it said EXACTLY what I pasted in above. That was a straight copy & paste from your site. I changed nothing! maybe you did????

Thanks anyway!

Does anyone know if you can use off-shore investments (say an investment property in Australia) to off-set tax paid in China? I will be based in Shanghai for thee years, paid locally in USD and taxed locally with no other income sources. My investments back home will generate a net loss and I will be classified as a non-resident of Australia while in China. Any advice would be appreciated.

Good question, I would also like to know the answer. The rent i'm getting won't cover the interest repayments and strata fees etc..(and especially if the RBA hike up rates as i'm on variable).

double post